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UNIVERSITY  OF  ILLINOIS  STUDIES 


IN  THE 

SOCIAL  SCIENCES 


VOL.    1.       NO.      3  SEPTEMBER.    1912 


SOURCES    OF 


Municipal  Revenues  in  Illinois 


BY 

LENT  DAYTON  UPSON,  Ph.D. 

Sometime  Fellow  in  Political  Science 
University  of  Illinois 


PRICE    75    CENTS 


URBANA-CHAMPAIGN,  ILLINOIS 

PUBLISHED  BY  THE  UNIVERSITY 
19x2 


COPYRIGHT  1912 
BY  THE  UNIVERSITY  OF  ILLINOIS 


TABLE  OF  CONTENTS 

Page 

INTRODUCTION  7 

CHAPTER  I. 

PROPERTY  TAXATION    1 1 

Tax  Levies  12 

Exemption  from  Taxation 15 

Method  of  Assessment  and  Collection 16 

Property  Taxes 17 

Personal  Property  Taxes 21 

Losses  in  Collection   24 

CHAPTER  II. 

LICENSES  AND  POLICE  FINES 26 

License  revenue • 26 

Liquor  licenses   26 

General  licenses 30 

Business   taxes    , 41 

Vehicle  licenses 43 

Foreign   fire   insurance  tax    45 

Police  fines 47 

t 

CHAPTER  III. 

GIFTS,  GRANTS  AND  SUBVENTIONS  55 

School  revenue  55 

State  grants  55 

Endowment  income  56 

Tuition  56 

Miscellaneous  income 57 

Gifts  by  individuals   57 

-CHAPTER  IV. 

REVENUE  FROM  SERVICES  RENDERED , .  58 

Departmental  receipts  • 58 

Public  service  privileges 61 

Special    assessments 68 

3 


240281 


CHAPTER  V. 

Page 

MUNICIPAL  INDUSTRIES  AND  PROPERTY  73 

Water    plants    73 

Electric  light  plants    • 86 

Cemeteries    89 

Libraries   • . .  90 

City  Hospitals  92 

Street    railways    . .  • 93 

Sewers     94 

Real  estate  94 

Other  city  property   95 

Interest  on  city  funds   96 

CHAPTER  VI. 

LOANS    101 

Bonded  Indebtedness    101 

Tax  warrants     105 

Floating  debt 107 

CHAPTER  VII. 
SUMMARY  AND  CONCLUSIONS  no 

BIBLIOGRAPHY 120 

INDEX   121 

MAP  SHOWING  LOCATION  OF  CITIES . .  126 


TABLES 

Page 

1.  Relation  of  Taxes  to  Total  Income,  Tax  Rates  and  Per  Capita 

Tax  Income  in  24  Illinois  Cities  in  1909 19 

2.  Assessed  Valuation  by  Classes  of  Property  and  Total  Assessment 

in  24  Illinois  Cities  for  the  Year  1909 20 

3.  Relation  of  the  Assessments  of  Real  and  Personal  Property  to  the 

Total  Assessments  in  City  and  County,  and  the  Relation  of  the 
City  Personalty  Assessment  to  that  of  City  Lots,  1909 23 

4.  City  Receipts  from  Town  Collectors  and  County  Treasurers,  1909    24 

5.  Number  of  Saloons,   Population  per  Saloon,  License  Rates  and 

other  data  relative  to  the  Liquor  Traffic  in  Illinois  Cities,  1909..     28 

6.  Total  and  per  capita  Income  from  License  Taxes,  Illinois  Cities, 

1909    34 

7.  Principal  Licenses  and  Rates 36-37 

8.  Business  Taxes,  Rates  and  Total  Income,  1909 42 

9.  Vehicle  Licenses,  Rates  and  Total  Income 44 

10.  Total  and  Per  capita  Income  from  Foreign  Fire  Insurance  Tax, 

1909    46 

11.  Disposal  of  Arrests  in  5  Illinois  Cities,  1909 50 

12.  Disposal  of  Arrests  in  Illinois  Cities  by  Percentages 51 

13.  Statistics   on   Strength   of    Police   Forces,    Number   of   Arrests, 

etc.,  1909  53 

14.  Revenues  of  Specified  City  School  Districts 56 

15.  Receipts  from  Fees,  Inspections,  Departmental  Receipts,  Charges, 

and  other  Miscellaneous  Sources,  1909 58 

16.  Fee  Offices  and  Methods  of  Reporting 60 

17.  Rates  and  Income  from  Franchises,  1909 63 

18.  Dates  of  Grant  and  Expiration  of  Franchises 65-66 

19.  Statistics  of  Municipal  Water  Plants  and  Cost  per  Hydrant  in 

Illinois  Cities,  1909 79 

20.  Statistics    Relative   to    Cost   of    Operation   per   Million    Gallons 

Pumped  by  Municipal  Water  Plants   80 

21.  Ratio  of  Operating  Costs  to  Receipts  in  Private  Water  Plants..     83 

22.  Ratio  of  Operating  Costs  to  Receipts  and  "Total  of  all  Costs" 

in  Municipal  Water  Plants  83 

23.  Statistics  Relative  to  the  Cost  of  Operation  in  Municipal  Lighting 

Plants    86 

24.  Charges  by  Private  Electric  Light  Plants  for  Arc  Service 88 

25.  Income  and  Cost  of  Operation  of  Municipal  Burial  Grounds 90 

26.  Statistics  of  Public  Libraries,  Illinois  Cities,  1909 91 

5 


Page 

27.  Receipts  from  City  Real  Estate 95 

28.  Balances  and  Receipts   for  General  Funds,  Special  Assessments 

and   Special   Funds,    1909 98 

29.  Statistics  Relative  to  Municipal  Indebtedness,  1909 100 

30.  Sources  and  Totals  of  General  Revenues,  1909 117 

31.  Sources  of  General  Revenue,  1909,  in  Percentages 118 

32.  Ranking  of  Twenty-four  Illinois  Cities,  1909 119 


INTRODUCTION. 

The  purpose  of  this  study  is  to  examine  tho  sources  of 
municipal  revenues  in  the  state  of  Illinois,  as  typified  by 
the  budgets  of  a  number  of  cities  for  the  year  1909,  noting 
the  variations  in  the  different  municipalities  and  the  means 
of  revenue  which  are  not  fully  utilized,  so  that  all  the 
financial  revenues  of  any  city  may  be  made  more  available 
to  the  others. 

As  cities  become  larger  the  per  capita  cost  of  adminis- 
tration tends  to  increase.  This  does  not  necessarily  mean 
that  there  is  more  waste  or  graft  in  the  management  of 
large  cities  than  small  ones ;  but  that  as  more  people  come 
together,  they  find  it  advantageous  to  do  in  common  many 
things  which  formerly  each  individual  undertook  for  him- 
self. In  a  village,  each  householder  must  occasionally  be 
his  own  truant  officer,  his  own  sanitary  inspector  or  his 
own  sidewalk  layer.  In  cities  such  duties  are  more  effec- 
tively cared  for  by  the  public  authorities.  Kindergartens, 
medical  and  dental  inspection  of  school  children,  charities, 
disease  prevention,  better  sanitation,  street  and  public 
lighting,  parks,  and  other  social  welfare  work  make  in- 
creased demands  upon  the  local  administration  where 
many  people  are  concentrated  in  a  city. 

At  the  same  time  the  maximum  legal  tax  rate  in  Illi- 
nois is  the  same  for  all  cities ;  and  growing  municipalities 
find  it  necessary  to  seek  for  more  sources  of  revenue  other 
than  property  taxation.  Such  potential  sources  of  revenue 
include  liquor  and  business  licenses,  vehicle  and  insurance 
taxes,  increased  returns  from  police  fines,  fees  and  de- 
partmental receipts,  and  profits  from  municipal  enter- 
prises. In  some  cases  enlarged  expenditures  are  tempor- 
arily met  by  increased  municipal  indebtedness. 

To  secure  data  for  this  study,  an  examination  was 
made  of  the  budgets  of  twenty-four  cities  of  over  8000 

7 


8  MUNICIPAL  REVENUES  IN  ILLINOIS  [368 

population,  located  in  various  parts  of  the  state.  Chicago 
has  not  been  included,  owing  to  the  magnitude  and  special 
features  involved  in  such  a  task,  and  also  to  the  fact  that 
a  comprehensive  study  has  already  been  made  of  its  mu- 
nicipal revenues.1  Questionnaires  were  sent  to  municipal 
officers;  annual  reports  were  received  from  nearly  half  of 
the  cities ;  and  personal  visits  were  made  to  all  but  two, — 
Quincy  and  Joliet. 

No  one  of  these  methods  of  inquiry  proved  entirely 
satisfactory.  It  was  difficult  to  secure  replies  even  to 
direct  questions.  No  printed  report  gave  a  complete  state- 
ment for  a  single  city.  In  the  cities  visited,  the  data  had 
to  be  secured  from  a  number  of  officials.  Nevertheless,  a 
complete  statement  was  secured  from  all  but  three  of  the 
cities  examined  covering  the  revenues  for  general  purposes ; 
and  the  omissions  in  the  three  cases  are  small  and  unim- 
portant. 

The  general  plan  followed  in  the  arrangement  of 
material  is  that  employed  by  the  Bureau  of  the  Census 
for  tabulating  the  statistics  of  cities,  a  general  outline 
of  which  is  shown  in  the  table  of  contents.  Since,  how- 
ever, the  cities  included  in  this  study  are  relatively  small, 
with  simple  financial  systems,  it  has  not  been  possible  to 
analyze  the  revenues  with  the  same  detail  as  the  Census 
Bureau. 

The  figures  used  as  a  basis  of  the  investigation  are 
those  of  actual  city  incomes  for  the  fiscal  year  1909,  rather 
than  the  revenues  which  legally  accrued  during  the  year. 
For  example,  delinquent  taxes  for  this  year  do  not  appear^ 
though  they  are  really  an  asset  and  will  ultimately  be 
collected.  In  their  place,  however,  appear  the  delinquent 
taxes  of  previous  years  which  were  paid  during  the  period 
under  consideration.  Outside  the  field  of  taxes,  this  cer- 
tainty of  ultimate  payment  is  not  so  great,  a  situation 
which  illustrates  the  error  of  keeping  city  accounts  upon  a 
receipt  and  expenditure  basis,  rather  than  on  a  basis  of 
legal  accruals  and  liabilities.  In  one  city  only  $700  of 

*C.  E.  Merriam :     Report  on  the  Municipal  Revenues  of  Chicago. 


369]  INTRODUCTION  9 

|900  license  fees  was  paid  within  the  fiscal  year.  Either 
the  $200  remaining  will  become  an  asset  of  the  year  fol- 
lowing and  will  offset  the  expenditures  of  a  year  to  which 
it  does  not  belong,  or  it  may  drop  out  of  the  ken  of  the 
city  treasurer  and  fail  to  be  collected. 

In  addition  to  an  analysis  of  the  revenues  received, 
an  attempt  is  made  to  explain  why  some  sources  of  revenue 
have  not  been  utilized.  In  some  cases,  there  has  been  local 
opposition  to  a  particular  form  of  taxation.  In  other  in- 
stances, the  cost  of  collection  has  been  too  large  in  pro- 
portion to  the  revenue  received.  In  still  other  cases,  a 
scientific  and  impartial  collection  of  charges  would  result 
in  increased  revenue. 

Further,  there  is  included  in  this  study  considerable 
data  not  directly  involved  in  city  budgets,  but  of  value 
to  officials  seeking  to  increase  municipal  revenues  and 
as  illustrations  of  facts  which  must  be  brought  to  the 
knowledge  of  officials  if  municipal  government  is  to  be 
progressively  and  permanently  bettered.  The  more  im- 
portant data  of  this  kind  relates  to  the  cost  of  operating 
municipal  water  and  light  plants,  the  time  and  date  of 
expiration  of  public  service  franchises,  the  rates  of  license 
taxes,  and  the  relation  between  the  number  of  liquor 
licenses  and  the  number  of  police. 

A  summary  of  the  conclusions  of  this  study  of  the 
municipal  revenue  system  of  Illinois  is  to  be  found  in  the 
concluding  chapter  of  the  text;  but  it  may  be  of  interest 
to  note  here  that: 

The  maximum  total  tax  rate  (of  one  percent  on  the 
supposed  full  value  of  property)  is  inadequate  to  meet  the 
needs  of  the  modern  city. 

The  percent  of  total  income  received  from  other 
sources  than  property  taxation  ranges  from  60^  in  Joliet 
to  3%  in  Urbana. 

Personal  property  estimated  to  equal  real  estate  in 
value  is  paying  only  approximately  one-tliirri  to  one-fifth 
of  its  legal  burden. 


10  MUNICIPAL  REVENUES  IN  ILLINOIS  [370 

Cities  which  give  a  limited  number  of  saloons  the  mo- 
nopoly of  the  town's  business,  will  lose  from  $5,000  to 
$10,000  a  year  unless  they  advance  the  license  fee  to  a  point 
where  the  cities  will  share  in  the  monopoly  profits. 

Business  taxes  can  be  made  to  contribute  ten  per  cent 
of  municipal  income  without  serious  opposition. 

The  vehicle  tax  has  proved  a  financial  success  in  all  of 
the  cities  in  which  it  has  been  tried.  In  Evanston  the  re- 
turn is  over  $8,000  a  year. 

Departmental  fees  and  charges  could  be  made  one  of 
the  more  profitable  sources  of  revenue  but  require  more 
secure  checks  on  the  collection  than  exist  at  present. 

Taxes  on  the  franchises  of  public  service  corporations 
are  being  imposed  as  rapidly  as  existing  franchises  expire, 
and  produce  from  $1,000  to  $5,000  annually. 

None  of  the  cities  investigated  receive  adequate  inter- 
est upon  public  funds. 

The  operation  of  public  water  plants  in  a  number  of 
cities  has  been  efficient  and  economical,  but  the  rates  are 
too  low  to  pay  a  profit,  and  frequently  do  not  even  meet  the 
cost  of  operation. 

Street  lighting  could  be  done  through  municipal  plants 
operated  in  connection  with  the  water  works  at  about  one- 
half  the  price  paid  under  private  contract. 

There  is  urgent  need  that  the  state  authorities  create 
some  municipal  clearing  house  of  facts  which  will  cooper- 
ate with  cities  in  installing  a  gradual  revision  of  the  sys- 
tem of  keeping  city  accounts,  uniform  city  reports,  and 
methods  of  publicity  which  will  keep  both  officials  and 
taxpayers  informed  of  advances  in  municipal  adminis- 
tration. 


CHAPTER  I 

PKOPERTY  TAXATION. 

The  Illinois  constitution  of  1870  authorizes  the  gen- 
eral assembly  to  vest  municipalities  with  the  power  to 
assess  and  collect  taxes  for  corporate  purposes.1  How- 
ever, this  privilege  is  restricted  by  further  constitutional 
provisions,  which  require  that  the  levies  be  uniform  in 
respect  to  persons  and  property;  that  privilege  taxes  be 
uniform  as  regards  the  class  on  which  they  operate;  that 
the  legislature  must  not  impose  taxes  upon  municipal  cor- 
porations for  corporate  purposes;  and  place  .restrictions 
on  the  amount  of  municipal  indebtedness. 

The  general  municipal  incorporation  act  of  1872,  the 
revenue  clause  of  which  was  amended  in  1897  to  apply  to 
all  cities  incorporated  in  any  manner,2  gives  to  munici- 
pal councils  the  following  powers: 

a — to  control  the  finances  and  property  of  the  corpor- 
ation 

b — to  appropriate  money  for  corporate  purposes  only, 
and  to  provide  for  the  payment  of  the  debts  and 
expenses  of  the  corporation 

c — to  levy  and  collect  taxes  on  real  and  personal  prop- 
erty for  general  and  special  purposes 

d — to  fix  the  amount,  terms  and  manner  of  issuing 
and  revoking  licenses;  and 

e — to  borrow  money  on  the  credit  of  the  corporation 
for  corporate  purposes3 

The  revenue  clauses  of  the  incorporation  act  also  pre- 
scribe the  method  of  assessment  and  collection  of  taxes; 
provide  that  all  municipal  expenditures  shall  be  included 

Constitution  of  1870,  Art.  9,  par.  9. 

'Kurd's  Revised  Statutes  (1908)  ch.  24,  par.  283. 

*Rev.  Stat.,  ch.  24,  par.  62. 

ii 


12  MUNICIPAL  REVENUES  IN  ILLINOIS  [372 

in  an  annual  appropriation  measure  passed  by  the  city 
council,  and  that  no  further  appropriation  may  be  made 
from  taxes  except  upon  a  majority  vote  of  the  electorate  ;4 
that  appropriations  must  precede  tax  lexies,  as  well  as 
contracts  entered  into  by  the  city;  and  that  the  tax  levy 
ordinance  must  state  both  the  rate  or  amount  and  the 
purpose  of  the  tax.  The  appropriation  ordinance  and  the 
tax  levy  ordinance  are  required  to  be  distinct,  and  the 
former  must  be  passed  first.5  The  levy  ordinance  is  filed 
with  the  county  clerk  who  calculates  the  rate  required  to 
j  aise  the  amounts ;  and  if  it  is  necessary,  he  is  required  to 
scale  the  rate  down  to  keep  the  aggregate  of  all  tax  levies 
within  the  legal  limit  of  three  per  cent  of  the  assessed 
valuation,  allowing  to  each  taxing  district  its  legal  pro- 
portion.6 

TAX  LEVIES 

Until  1909  the  ordinary  tax  rate  was  limited  to  five 
per  cent  of  one-fifth  of  the  cash  value  of  the  taxable  prop- 
erty. An  amendment  of  that  year  raised  the  basis  of 
assessment  to  one-third  of  the  actual  cash  value,  and  made 
three  per  cent  the  legal  tax  limit.7  This  statute  does  not 
affect  the  real  tax  rate,  but  raises  the  debt  limit  sixty 
per  cent. 


*Ibid,  ch.  24,  par.  89. 

BPeo.  v.  Florville,  207  III.  79. 

'The  method  of  scaling  as  prescribed  by  the  Juul  law  is  as  follows :  a 
total  is  found  of  the  rates  necessary  to  give  the  certified  sum;  the  amount 
over  three  per  cent  is  used  as  a  numerator  and  the  total  percent  as  a 
denominator,  each  item  being  reduced  in  this  proportion.  Professor 
C.  E.  Merriam  in  his  "Report  on  the  Municipal  Revenues  of  Chicago", 
(City  Club  of  Chicago,  Pub.  No.  2,  page  86)  gives  this  example:  "the 
West  Town  demands  for  tax  levy  (state,  school  building  and  special 
sanitary  district  excepted)  aggregated  in  1003,  $7.55  per  $100.  These 
special  rates  were  then  scaled  down  255-755,  and  the  total  thus  reduced 
to  five  per  cent." 

7Laws  of  1009,  p.  308. 


373]  PROPERTY  TAXATION  13 

The  taxes  which  cities  may  levy  unrestricted  by  refer- 
endum are  these : 

For  general  purposes 1.2% 

Interest  and  sinking  funds. . .  ."a  sum  sufficient" 

Educational  purposes  1.5% 

School  buildings 1.5% 

Public  libraries .12% 

Parks 12% 

Cyclone  tax .3% 

The  taxes  to  provide  interest  and  sinking  funds  are 
limited  by  the  constitutional  provision  that  the  total  debt 
shall  not  exceed  five  per  cent  of  the  assessed  valuation. 
Taxes  for  such  purposes,  however,  furnish  a  means  for 
evading  the  statute  limiting  taxes  for  general  purposes 
to  1.2%  of  the  assessed  valuation.  Not  infrequently,  cities 
incur  permanent  indebtedness  for  current  expenses,  and 
retire  the  bonds  out  of  other  than  taxes  for  general  pur- 
poses. Nearly  four  per  cent  of  the  municipal  debt  is  of 
this  nature.8  An  interest  and  sinking  fund  tax  may  also 
be  levied  to  pay  such  school  debt  as  was  contracted  before 
the  passage  of  the  general  school  act  of  1889.  In  cities  of 
over  100,000  population  the  library  tax  is  limited  to  .06% 
of  the  assessed  valuation;  and  in  all  cities  under  1,500 
population  the  library  tax  is  included  in  the  1.2%  tax 
for  general  purposes.9 

The  tax  of  .12%  to  provide  for  the  establishment 
and  maintenance  of  parks  applies  to  cities  having  a  popu- 
lation of  less  than  50,000,10  a  restriction  which  excludes 
only  the  cities  of  Chicago,  Peoria,  Springfield  and  East  St. 
Louis.  Within  three  of  these  municipalities  park  taxes 
are  levied  by  the  park  districts,  which  are  distinct  taxing 
areas  erected  without  particular  reference  to  municipal 
boundaries.  Such  special  taxing  areas,  which  may  also 
be  created  in  smaller  cities  than  those  mentioned,  are 

'See  ch.  VI. 

'Rev.  Stat.  ch.  81,  par.  I. 

10Ibid.  ch.  105,  par.  290. 


14  MUNICIPAL  REVENUES  IN  ILLINOIS  [374 

of  three  kinds, — sanitary,  park  and  pleasure  drive  dis- 
tricts. They  are  formed  by  a  favorable  popular  vote  called 
after  a  petition  to  the  county  clerk,  the  voting  being  within 
the  boundaries  specified,  for  or  against  the  proposition. 

The  powers  of  the  commissioners  controlling  these 
taxing  districts  have  been  changed  frequently;  and  the 
confusion  thus  created  has  been  added  to  by  the  Juul  law 
of  1901  which  consolidates  and  limits  all  of  the  tax  levies 
within  a  city.  The  combined  tax  must  not  exceed  the  legal 
limit,  which  sometimes  requires  that  the  tax  for  one  district 
shall  be  scaled  down  below  the  maximum  in  order  that  the 
aggregate  tax  for  all  purposes  in  another  district  fall 
within  the  legal  limit. 

The  taxation  of  property  is  the  natural  result  of  the 
theory  that  all  persons  should  be  taxed  according  to  their 
ability;  and  ownership  of  property  and  particularly  of 
real  estate,  in  communities  which  have  not  reached  a  high 
industrial  development,  is  considered  the  most  concrete 
expression  of  ability  to  pay  and  of  the  measure  of  benefit 
received  from  governmental  activities.  The  situs  of  real 
property  is  permanent,  and  it  is  therefore  possible  to  tax 
such  property  when  owned  by  non-residents,  in  the  same 
manner  as  that  of  residents. 

Unoccupied  tracts  held  for  increment  in  value  present 
a  special  problem.  In  some  jurisdictions  agricultural  and 
unimproved  property  is  exempted  from  taxation  in  whole 
or  in  part,  and  such  exemptions  have  been  sustained  ex- 
cept in  contravention  of  special  constitutional  provisions.11 
In  Illinois  no  such  exemptions  are  allowed  by  law,  but 
vacant  property  in  the  shape  of  lands  is  not  an  important 
item  in  the  assessed  valuations  except  in  a  few  cities.  In 
East  St.  Louis  such  property  stands  in  the  ratio  of  one  to 
three  when  compared  with  the  assessment  of  city  lots;  in 
several  municipalities  the  ratio  is  one  to  ten,  but  in  the 
majority  it  is  less  than  this.  The  assessment  for  lands 
and  lots  is  presented  in  table  No.  2. 

"Connecticut,  Indiana,  Iowa,  Maryland,  Michigan,    (with  exceptions) 
Ohio,  South  Carolina  and  Tennessee. 


375]  PROPERTY  TAXATION  15 

The  general  rule  for  the  taxation  of  personal  prop- 
erty in  Illinois  provides  for  its  assessment  at  the  domicile 
of  the  owner;  but  some  classes  of  tangible  personalty  are 
taxed  in  situs,,  and  goods  in  transitu  are  assessed  upon  the 
owner  at  the  place  where  the  shipment  originated.  In- 
tangible property  is  also  subject  to  taxation,  but  credits 
may  be  offset  by  certain  debts;  and  while  franchise  values 
are  taxable  no  method  of  local  assessment  is  prescribed. 
Illinois  corporations,  except  mercantile  and  manufactur- 
ing, are  assessed  by  the  state  upon  the  value  of  their  capital 
stock,  less  the  assessed  value  of  tangible  property  as  made 
by  the  local  assessors.  Capital  stock  not  assessed  in  this 
fashion  by  the  state  board  of  equalization  should  be  listed 
as  personal  property.  Aside  from  the  tax  upon  the  capital 
stock  of  railroads  incorporated  within  the  state,  railroads, 
must  pay  taxes  upon  their  personal  and  real  property, 
assessed  principally  by  the  state  board  of  equalization, 
the  valuation  being  apportioned  to  the  counties  to  a  large 
extent  in  proportion  to  mileage.  The  value  of  side  tracks 
and  railroad  buildings  is  returned  wholly  to  the  district 
within  which  they  are  located ;  and  personal  property  other 
than  rolling  stock  is  locally  assessed. 

EXEMPTIONS  FROM  TAXATION. 

Exemptions  from  taxation  in  Illinois  are  fewer  than 
in  most  states.  »The  constitution  authorizes  the  exemp- 
tion by  the  legislature  of  real  and  personal  property  of 
states,  counties  and  other  municipal  corporations,  and 
such  other  property  as  may  be  used  exclusively  for  agri- 
cultural and  horticultural  societies,  schools,  religious  or- 
ganizations, cemeteries,  and  for  charitable  purposes,  when 
the  exemption  is  made  by  general  law.12  By  statute  the 
legislature  has  provided  for  these  exceptions,  and  also 
established  other  specific  exemptions  as  follows, — school 
lands,  not  leased ;  fire  apparatus ;  public  markets ;  all  state 
property;  and  property  used  by  mechanical  and  phil- 

^Const.  Art.  9,  par.  3. 


16  MUNICIPAL  REVENUES  IN  ILLINOIS  [376 

osophical  societies  without  profit.13  A  law  exempting  fra- 
ternal insurance  funds  was  held  unconstitutional,14  as 
have  been  other  acts  attempting  to  exempt  other  classes  of 
property  not  embraced  in  the  constitutional  provisions. 

METHOD  OF  ASSESSMENT  AND  COLLECTION. 

For  the  assessment  of  taxes  there  is  elected  an  as- 
sessor in  each  town,  except  in  those  counties  not  under 
township  government.  In  these  latter  localities  the  county 
treasurer  acts  as  assessor,  the  deputies  being  appointed 
by  the  county  board.  In  the  spring  of  the  year  valuation 
is  made  of  the  property  within  each  taxing  district,  the 
owner  being  required  to  fill  out  a  schedule  of  personal 
property.  Once  in  four  years  real  property  must  be  viewed 
for  assessment.  The  results  both  as  to  real  and  personal 
values  are  certified  to  the  county  clerk,  who  corrects  all 
apparent  errors.  The  county  boards  of  review  revise  as- 
sessments upon  request  of  the  owner;  hear  complaints  of 
overvaluation;  and  may  correct  any  inequality  among 
townships,  provided  the  grand  total  of  assessments  is  not 
diminished.  The  assessments  are  then  certified  to  the 
state  auditor  who  transmits  them  to  be  passed  on  by  the 
state  board  of  equalization.  This  board  may  equalize  total 
valuations  among  counties  by  increasing  or  reducing  the 
local  assessments  by  not  more  than  ten  per  cent.  The 
final  results  are  certified  back  to  the  county  clerks,  who 
estimate  and  spread  the  taxes15  on  the  tax  collectors  books. 

In  counties  under  township  government,  the  county 
treasurer  is  ex  officio  county  collector,  and  receives  from 
the  town  collector  state  and  county  taxes ;  and  also  collects 
delinquent  city  taxes  and  special  assessments.  In  counties 
not  under  township  government  the  sheriff  is  ex-officio 
collector  of  taxes.  Taxes  are  due  the  first  of  January; 
personal  property  taxes  must  be  paid  by  March  first;  and 

™Rev.  Stat.  ch.  120,  par.  2. 

"Modern  American  Fraternal  Order  v.  Board  of  Review,  223  III.  54. 

™Rev.  Stat.  ch.  120,  par.  128. 


377]  PROPERTY  TAXATION  17 

all  taxes  on  real  property  become  delinquent  on  June  first. 
In  cases  of  unpaid  taxes,  after  certain  notice  and  adver- 
tisement, application  is  made  to  the  county  court  for  judg- 
ment. Upon  judgment  being  given  (from  which  an  appeal 
may  be  taken  to  the  Supreme  Court  if  bond  for  costs  is 
given),  the  property  or  a  necessary  portion  of  it  is  adver- 
tised for  sale.  The  property  is  then  sold  to  the  person 
bidding  the  delinquent  taxes  plus  the  least  per  cent 
for  penalty.  Property  so  sold  may,  however,  be  redeemed 
at  the  office  of  the  county  clerk  within  two  years,  upon 
payment  of  the  delinquent  tax,  subsequent  taxes  and  as- 
sessments, and  the  penalty,  this  last  being  graduated  from 
that  bid  to  four  times  that  sum  during  the  last  six  months 
of  grace.10 

PROPERTY  TAXES. 

The  foregoing  is  a  meager  outline  of  the  system  of 
taxation  as  applied  to  municipalities  in  Illinois  and  may 
make  clearer  a  review  of  the  workings  of  the  property 
tax.17 

In  tables  30  and  31  is  a  statement  of  the  amount  of 
property  tax  received  by  each  of  the  twenty-four  cities  in 
Illinois  for  which  data  was  secured,  and  the  relation  of 
such  sums  to  the  total  amount  of  municipal  income  for  the 
year  1909.  The  tax  rates  are  given  in  table  1,  and  with 
them  the  ratios  of  taxes  to  the  total  city  incomes  from 
which  all  commercial  revenues  except  those  producing  a 
profit  have  been  subtracted.  In  three  instances18  the  net 
profit  from  commercial  enterprises  is  included  in  the  total 
income.  The  city  which  receives  the  least  proportion  of 
its  revenue  from  property  taxes  is  Joliet,  the  return  of 
40.1%  of  the  whole  income.  Streator  follows  with  51.25%  ; 

™Rev.  Stat.  ch.  120,  par.  182-210. 

"A  more  complete  outline  will  be  found  in  A  Report  on  the  Taxation 
and  Revenue  System  of  Illinois,  prepared  for  the  Special  Tax  Commission 
of  Illinois  by  John  A.  Fairlie.  A  compilation  of  Tax  Laws  and  Judicial 
Decisions  accompanies  the  report  of  the  commission. 

"See  Table  19. 


18  MUNICIPAL  REVENUES  IN  ILLINOIS  [378 

while  the  maximum  percentage  received  is  97.6%  in  Ur- 
bana.  The  average  is  68.1%.  For  comparison  it  is  inter- 
esting to  separate  the  cities  receiving  saloon  licenses  from 
those  which  do  not.  In  the  seven  no-saloon  license  cities19 
the  average  of  the  total  revenue  received  from 
property  taxation  is  86.2%  while  the  average  for  the  re- 
maining cities  is  60.5%. 

A  more  interesting  comparison  of  the  taxes  received 
by  cities  for  general  purposes  is  upon  a  per  capita  basis. 
Though  such  a  relationship  is  inaccurate  inasmuch  as 
population  is  not  a  direct  creator  of  taxes,  yet  population 
does  have  a  direct  influence  upon  the  cost  of  government. 
The  minimum  per  capita  general  tax  is  in  Streator,  the 
amount  being  |2.33  per  person.  The  next  lowest  is  $2.76 
in  Joliet ;  while  the  highest  rate  is  $8.34  in  East  St.  Louis. 
In  this  comparison  the  no  license  cities  do  not  hold  so  un- 
favorable a  position  in  the  matter  of  taxation,  the  average 
rate  for  the  seven  municipalities  being  $4.62  per  capita. 
The  average  for  the  remaining  corporations  is  $4.50 — not  a 
considerable  difference. 

A  third  and  more  frequent  method  of  considering  city 
finances  is  a  comparison  of  the  tax  rates.  In  table  1  is 
shown  the  general  rate  for  each  city  for  each  $100  of  as- 
sessment (including  administrative,  library,  sanitary, 
park,  bond  and  interest  taxes) ;  the  complete  school  rate; 
and  the  total  rate.  The  highest  rate  for  general  purposes 
is  in  Quincy,  $2.37.  La  Salle  follows  with  $2.15;  while 
the  smallest  is  $1.25  in  the  "dry"  city  of  Rockford.  Cities 
having  no  saloons  stood  highest  in  the  average  per  capita 
tax,  yet  with  the  exception  of  Urbana  their  tax  rates  are 
quite  normal.  This  lack  of  relationship  between  the  tax 
rate  and  the  per  capita  tax  income,  coupled  with  the  fact 
that  cities  in  which  a  high  tax  rate  should  be  anticipated 
have  quite  the  contrary,  may  be  due  to  one  or  both  of  two 
causes:  variation  in  the  basis  of  local  assessments,  or  in 
the  per  capita  wealth  of  the  several  cities. 

"Champaign,    Decatur,    Evanston,    Galesburg,   Jacksonville,    Rockford 
and  Urbana. 


379] 


PROPERTY  TAXATION 


19 


TABLE  i. 

RELATION    OF    PROPERTY    TAXES    TO    TOTAL    INCOME/    TAX    RATES 
PERCAPITA  TAX  INCOME  IN  24  ILLINOIS  CITIES  IN  1909. 


Percent  of  Total 
income1 

Percapita  Tax 
(general) 

g 

ll 

g 
O 

<U 
Ifl 

M 

</} 

Jj 

K 

"c3 

I 

Percapita  Realty 
Assessment 

Percapita 
Personalty 

1 

"rt 
1 

Alton 

57.8 

$3.42 

$1.42" 

$2.00 

$3.42 

$1^8 

$84 

$242 

Aurora    

70.0 

4.80 

i./o 

:.5.) 

3-2I4 

T1  Ou 

208 

*pOif 

75 

*P-^T-^ 

283 

1-45) 

Belleville 

54-7 

3.76 

1.  60 

I  8=; 

•7  xr 

I  ^7 

C2 

2OQ 

Bloomington    .  .  . 

61.5 

4.26 

1-53 

O..OJ 

1.72 

O'HO 

3.25 

1  0/ 

242 

j^ 
78 

-6VA/ 

320 

Champaign   

92.0 

3-88 

i-34 

1.92 

3.26 

216 

86 

302 

Danville 

c6  o 

167 

1.46 

1.  20 

2.66 

181 

OI 

272 

Decatur  

jv-v 
83.7 

O'W 

4.02 

1.67 

2.76 

4-43 

169 

y1 

71 

*/« 

240 

E.  St.  Louis  

71.0 

8.34 

i.483 

1.90 

3.38 

195 

27 

222 

Elgin    

71-4 

4.58 

1-33 

1.90 

3-23 

202 

122 

324 

Evanston    

65.1 

5.38 

Freeport   

62.2 

3-80 

1.49 

1-95 

3-44 

Galesburg  

91.8 

5.58 

1-57 

1.69 

3-26 

217 

72 

289 

Jacksonville  .... 

85.8 

376 

1.40 

2.OO 

3-40 

192 

77 

209 

Joliet   

40.1 

2.76 

1.40 

1.85 

3-25 

155 

48 

203 

LaSalle    

52.3 

3-41 

2.15 

1.  80 

3-95 

121 

4i 

162 

Moline 

61.0 

4.44 

i-93 

2.42 

4-35 

154 

81 

2Vt 

Ottawa 

ce  7 

e  2O 

I  0^ 

2.OO 

•i  nr 

IS2 

98 

"•JO 
280 

Peoria  

DO-/ 
65.5 

3<~u 
5-l8 

*»yp 

1.78 

1.87 

O-VO 
3-65 

A  3" 
223 

68 

291 

Quincy    

70.0 

6.50 

2.37 

1.42 

3-79 

117 

49 

166 

Rockford    

87.7 

472 

1.25 

1.07 

2.32 

200 

116 

376 

Rock  Island    .  .  . 

64-5 

4-37 

1.85 

1-93 

3-26 

183 

57 

240 

Springfield   

64.0 

5-68 

1.81 

1-73 

3-54 

233 

81 

321 

Streator    

51-3 

2-33 

1.30 

2.10 

340 

135 

5i 

186 

Urbana    

97.6 

5-02 

2.03 

2.61 

4.64 

203 

50 

253 

1Excluding  commercial  revenue,  except  net  profit. 

2I9IO. 

3$i.83  sanitary  tax  extends  over  a  limited  area. 

4Larger  proportion. 


20 


MUNICIPAL  REVENUES  IN  ILLINOIS 


[380 


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381]  PROPERTY  TAXATION  21 

PERSONAL   PROPERTY   TAXES. 

It  is  quite  possible  that  variable  standards  of  real 
property  assessment  prevail  in  different  municipalities, 
but  these  cannot  be  ascertained  without  a  more  intensive 
investigation  than  has  here  been  possible.  It  is  even  more 
probable  that  there  is  an  inequality  of  personal  property 
assessments,20  which  may  be  shown  through  a  comparison 
with  the  assessments  of  the  cities. 

Table  2  is  an  exhibit  of  the  property  assessment  of  the 
cities  considered  giving  the  assessments  in  the  classes 
under  which  they  are  returned.  In  table  3  is  the  ratio  of 
the  real  and  personal  assessment  to  the  total  assessment 
in  each  city,  as  compared  with  the  ratios  in  the  counties 
in  which  these  cities  are  located,21  as  well  as  the  ratio  of 
personal  property  to  the  assessed  value  of  city  lots.  That 
these  ratios  would  have  a  considerable  range  would  be 
anticipated,  since  sections  of  the  state  vary  widely  in  the 
amount  and  nature  of  their  wealth.  That  this  variation  is 
greatest  within  cities  is  apparent.  Of  the  assessed  valuation 
in  counties,  the  proportion  of  personal  property  to  real 
estate  is  least  in  Champaign  county,  being  16.8%  of  the 
total,  the  greatest  in  Kane  county,  where  it  constitutes 
27.87%  of  the  total  assessment.  Thus  the  variation  has  a 
range  of  11.07%  of  the  whole.  The  least  proportion  of 
personal  property  in  cities  is  in  East  St.  Louis,  13.5% ; 
while  the  largest  proportion,  39%,  is  in  Ottawa.  The  var- 
iation is  25.5%  of  the  whole,  or  twice  the  variation  as 
between  counties.  Large  manufacturing  or  railroad  prop- 
erties situated  in  a  locality  would  tend  to  increase  the  real 
property  ratio,  but  cannot  account  for  the  entire  difference. 
That  the  method  of  assessing  personal  property  is  to  a 
large  extent  responsible  for  this  is  proven  by  comparing 
two  corporations  of  a  homegeneous  character,  as  the  con- 
tiguous cities  of  Champaign  and  Urbana.  In  the  former, 
personal  property  constitutes  28.9%  of  the  total  assess- 

20Fairlie,  supra  cit,  p.  41. 

"Biennial  Report  of  the  Auditor  of  Public  Accounts  (1908)  p.  154. 


22  MUNICIPAL  REVENUES  IN  ILLINOIS  [382 

ment,  while  in  the  latter  it  is  only  19.7  %.  Similarly,  the 
Rock  Island  assessment  has  23.5%  in  personalty,  while  in 
the  adjacent  city  of  Moline  34.5%  of  the  property  is  per- 
sonal. Elgin  and  Aurora  are  cities  of  similar  size  and 
nature,  in  the  same  county;  personal  property  amounts  to 
38%  of  the  total  assessment  in  one,  and  to  only  26.2%  in 
the  other. 

In  order  to  eliminate  any  bias  which  might  occur  by 
including  vacant  lands  and  railroads  in  the  real  property 
assessment,  the  personal  property  of  each  city  has  also 
been  compared  with  the  assessed  value  of  city  lots.  It 
was,  however,  impossible  to  separate  telegraph  and  tele- 
phone values  from  the  personalty,  as  was  desirable  for 
this  comparison.  By  this  method,  Ottawa  still  had  the 
largest  proportion  of  personal  property,  41.5%  of  the 
total;  Urbana  had  least,  21.6%.  The  range  of  variation 
was  19.9%,  or  several  percent  less  than  in  the  comparison 
made  with  the  total  real  property. 

The  variation  in  assessments  is  further  emphasized 
by  a  review  of  the  per  capita  assessments  of  real  and  per- 
sonal property  in  each  city.  In  two  cities  in  which  the 
real  property  assessment  ranges  from  $202  to  $203  per 
person,  the  per  capita  assessment  of  personal  property 
varies  from  $122  to  $50;  and  in  seven  cities  in  which  the 
real  property  assessment  varies  from  $155  to  $195  per 
capita,  the  personalty  assessment  varies  from  $27  to  $91. 

These  figures  indicate  the  danger  of  accepting  the 
city  tax  rate  as  testimony  of  the  cost  of  administration. 
Rockford  has  the  lowest  tax  rate  for  general  purposes  of 
the  cities  considered,  yet  has  a  per  capita  assessment  al- 
most double  the  average  for  the  state.  Quincy  with  the 
highest  tax  rate  for  general  purposes  is  among  those  having 
the  smallest  per  capita  assessment. 

Though  the  amount  of  personal  property  varies  in 
each  community,  the  facts  indicate  that  several  cities  are 
collecting  taxes  on  much  less  than  the  tangible  personal 
property  within  their  jurisdiction.  Under  such  conditions 


383] 


PROPERTY  TAXATION 


an  increase  of  city  revenues  may  be  more  or  less  easily 
secured  by  action  of  the  township  assessor  and  the  county 
board  of  review. 


TABLE  3. 

RELATION  OF  THE  ASSESSMENTS  OF  REAL  AND  PERSONAL  PROPERTY  TO  THE 
TOTAL  ASSESSMENTS  IN  CITY  AND  COUNTY,  AND  THE  RELATION  OF  THE 
CITY  PERSONALTY  ASSESSMENT  TO  THAT  OF  CITY  LOTS. 


County  1907 

City,  1909 

£ 
b 

£> 

3 

1 

& 

Personal 

1 

tf 

Personal 

Personal    to 
Lots  only 

3 

Personal 

Alton 

Madison    .  .  . 
Kane    
St.  Clair  ... 
McLean    .... 
Champaign  . 
Vermilion     . 
Macon    
St.  Clair.... 
Kane    
Cook    
Stephenson 
Knox    
Morgan   .... 
Will 

73-44 
72.13 
80.30 
80.12 
83.18 
79.90 
80.94 
80.30 
72.13 
77.20 
76.14 
76.50 
79-44 
81.00 
82.56 
78.07 
82.56 
80.44 
72.20 
74-94 
78.07 
80.63 
82.56 
83.18 

26.56 
27.87 
19.70 
19.88 
16.82 

20.10 
19.06 
19.70 
27.87 
22.80 
23.86 
23.50 
20.56 
19.00 
1744 
21.93 
17-44 
19.56 
27.80 
25.06 
21.93 
19-37 
17-44 
16.82 

65.2 
73-8 
75-2 
75-3 
71.1 
65-3 
70.0 
86.5 
62.0 

75-0 
71-5 
76.5 
75-0 
65-5 
61.0 
76.9 
70.2 
69.0 
76-5 
74-0 
72.6 
80.3 

34-8 
26.2 
24.8 
24.7 
28.9 
34-7 
30.0 
13-5 
38.0 

25.0 
28.5 
24-5 
25.0 
34-5 
39-0 
23.1 
29.8 
31-0 
23-5 
26.0 
27.4 
19.7 

62.2 
71-5 
73-0 
71-5 
69.6 
66.1 
68.0 
77-6 
60.5 

72.0 
697 
75-8 
71-5 
61.2 
58.5 
75-7 

654 
74-6 
69.0 
77-9 
78.4 

37-8 
28.5 
27.0 
28.5 
30-4 
33-9 
32.0 
22.4 
39-5 

28.0 
30-3 
24.2 
28.5 
28.8 
41-5 
24-3 

34-6 
25-4 
3i.o 

22.1 
21.6 

Aurora 

Belleville  
Bloomington  .... 
Champaign  
Danville  
Decatur  
E.  St.  Louis  .... 
Elgin  
Evanston  
Freeport 

'Galesburg  
Jacksonville  
Joliet  

LaSalle  
Moline  

LaSalle    .... 
Rock    Island 
LaSalle    .... 
Peoria    
Adams     
Winnebago 
Rock    Island 
Sangamon    . 
LaSalle   .... 
Champaign  . 

Ottawa 

Peoria  
•Quincy  

Rockford  

Rock  Island  
Springfield  
Streator  
Urbana  

24  MUNICIPAL  REVENUES  IN  ILLINOIS  [384 

LOSSES  IN  COLLECTION. 

Another  cause  of  considerable  loss  to  cities  is  that 
of  interest  on  delinquent  taxes.  The  average  term  of  mu- 
nicipal loans  made  in  anticipation  of  taxes  is  about  five 
months,  or  only  a  trifle  longer  than  that  allowed  for  the 
collection  of  taxes.  The  township  collector  relinquishes 
his  books  on  the  tenth  of  March  and  the  duty  of  collection 
passes  to  the  county  treasurer,  thus  necessitating  duplica- 
tion of  the  collection  machinery.  An  idea  of  the  import- 
ance of  this  latter  officer  in  the  collection  of  delinquent  city 
taxes  may  be  gained  from  the  following  exhibit,  which 
gives  the  sums  received  by  a  number  of  cities  during  the 
fiscal  year  1909  from  the  two  collecting  agents,  and  the 
percentage  of  the  total  receipts  accredited  to  each.  It 
has  been  suggested  that  one  of  these  agents  be  eliminated 
with  a  view  of  lessening  the  expenses  of  collection.22 

TABLE  4. 

CITY  RECEIPTS  FROM  TOWN  COLLECTORS  AND  COUNTY  TREASURERS,  1909. 

City                        Town  Coll.        Per  Cent  County  Coll.  Per  Cent 

Evanston $73.889                53-3%  $64,757  46-7% 

Joliet    61,347               49.6  62,392  50.4 

Ottawa  39,390               71.8  15,419  28.2 

Peoria    218,022               75.2  71,538  24.8 

Rockford 66,320               43.6  131,861  66.4 

One  of  the  fixed  charges  in  the  collection  of  taxes  is 
the  percentage  going  to  the  collector  for  remuneration; 
to  which  may  be  added  the  fee  of  the  county  clerk  for 
extension.  In  addition  to  the  2%  collection  fee,  in  Free- 
port  the  reserve  for  the  loss  through  unpaid  taxes  and 
cost  of  collection  of  delinquent  taxes  was  1.1%  of  the 
total  levy,  or  a  total  of  3.1%.  Evanston,  in  addition  to  the 
charges  of  the  collector,  paid  the  county  treasurer  .03% 
of  the  total  for  the  extension  of  the  levy,  and  .92%  of  his 
collections  as  a  commission.  Based  upon  the  amount  lev- 
ied, 1.46%  was  deducted  for  the  cost  of  collection,  .032% 
for  clerk's  fees;  and  4.78%  was  uncollectable,  making  the 

"Fairlie,  Taxation  and  Revenue  System  of  Illinois,  p.  17. 


385]  PROPERTY  TAXATION  25 

theoretical  net  income  to  the  city  93.728%  of  the  levy.  Of 
the  losses  the  largest  item  of  4.78%  was  diminished  a  frac- 
tion of  a  percent  by  the  payment  of  back  taxes.  Through 
back  taxes  and  the  extension  of  the  levy  specified  in  the 
ordinance,  the  city  received  94.5%  of  the  sum  requested. 
The  same  city  realized  93.4%  of  the  library  taxes  levied, 
4.18%  of  the  loss  being  in  uncollectable  taxes.  The  amount 
of  back  taxes  received  was  only  .01375%  of  the  total  levy. 
Thus  far  no  reference  has  been  made  to  the  Road  and 
Bridge  tax  which  by  the  law  of  188323  may  be  assessed  in 
each  township.  Under  this  provision  one-half  of  such 
receipts  are  returned  to  the  cities  in  the  township  for  the 
building  and  repair  of  roads.  By  an  act  of  190924  the 
statute  was  changed  so  that  cities  over  20,000  were  to  re- 
ceive all  such  taxes  levied  within  their  boundaries,  which 
was  deemed  a  more  equitable  distribution.  There  has  been, 
however,  some  question  as  to  the  legality  of  the  change. 
In  Danville  the  city  was  not  allowed  to  come  into  posses- 
sion of  the  funds ;  and  Rockford  has  been  sued  by  the  town- 
ship highway  commissioners  for  $60,000,  which  was  re- 
ceived by  the  city.  In  table  30  in  a  statement  of  the  shares 
of  the  Road  and  Bridge  tax  which  came  to  the  cities  in 
1909.  Owing  to  the  present  legal  situation,  comment  would 
be  useless. 


*Rev.  Stat.  ch.  121,  par.  16. 
'Laws  of  1909,  p.  332. 


CHAPTER   II 
LICENSES  AND  POLICE  FINES. 

LICENSE  REVENUE. 

License  charges  are  legally  of  two  kinds, — those  relat- 
ing to  occupations  and  industries  which  may  be  absolutely 
prohibited,  and  those  upon  industries  which  only  permit 
of  regulation.  A  more  practical  division,  however,  is  made 
upon  the  basis  of  financial  return  to  the  municipality, 
liquor  licenses  being  placed  first,  followed  by  general 
licenses,  business  licenses  and  the  vehicle  tax.  It  is  in 
this  order  that  they  are  discussed. 

Liquor  Licenses. 

The  power  of  the  legislature  to  tax  the  traffic  in  intoxi- 
cating liquors  is  enumerated  in  the  constitution  of  the 
state1  and  was  delegated  to  municipalities  by  the  general 
act  of  1872.2  This  act  gave  to  city  councils  the  right  to 
regulate,  license  and  prohibit  the  selling  of  malt,  mixed 
or  fermented  liquors,  any  license  not  to  extend  be- 
yond the  municipal  year  in  which  it  was  granted.  It  is 
further  provided  that  cities  must,  in  licensing,  conform 
with  the  general  state  laws  in  force. 

There  are  now  a  number  of  state  statutes,  providing 
among  other  things,  that  the  minimum  license  for  a  shop 
where  the  aforementioned  liquors  are  sold  at  retail  shall  be 
$500  per  year,  which  sum  shall  be  collected  in  advance  for 
such  periods  as  the  city  council  may  designate.  Licenses 
for  the  sale  of  malt  liquors  may  not  be  granted  for  less  than 
$150  per  year.  There  are  no  state  laws  concerning  the 
wholesale  liquor  trade.  The  imposition  of  a  license  on  these 
dealers  lies  in  the  discretion  of  the  municipal  councils. 

'Const,  of  1870,  Art.  9,  par.  i. 

'Kurd's  Revised  Statutes,  (1908),  ch.  24,  par.  62,  item.  46. 
26 


387]  LICENSES  AND  POLICE  FINES  27 

When  a  license  is  required,  the  penalty  for  operating  with- 
out one  is  a  fine  of  from  $50  to  $150,  the  possession  of  a 
government  permit  being  prima  facie  evidence  of  the  sale. 
Any  license  is  subject  to  revocation  should  the  owner 
maintain  more  than  one  saloon,  or  permit  disorderly  con- 
duct or  gambling. 

The  holder  of  a  dramshop  license  is  required  to  pro- 
vide a  bond  of  $3,000  to  cover  any  damages  which  may 
be  sustained  by  reason  of  his  selling  intoxicating  liquors ; 
and  he  may  be  required  to  support  a  person  kept  in  a 
state  of  continual  intoxication.  The  rights  of  an  injured 
person,  his  heir  or  employer,  may  be  enforced  against  the 
owner  of  the  building  in  which  the  offending  saloon  is 
located. 

Certain  matters  of  regulation  are  left  to  the  local 
authorities,  among  which  are  eligibility  for  a  license,  max- 
imum cost  of  the  license,  distribution  of  the  license  money, 
periods  of  payment,  limitation  of  the  license  district  and 
restriction  of  the  number  of  saloons. 

Table  31,  giving  the  percentage  of  total  city  income  re- 
ceived from  liquor  licenses,  ranging  (in  license  cities)  from 
20.7%  in  Aurora  to  41.3%  in  Streator,  shows  the  import- 
ance of  such  revenues  to  municipalities.  It  will  be  gen- 
erally admitted  that  the  presence  of  saloons  is  not  an  un- 
mitigated benefit,  yet  city  revenue  systems  have  been  con- 
structed with  a  view  of  large  incomes  from  this  source.  The 
problem  of  saloon  licensing  is  therefore  one  of  securing  the 
maximum  revenue  with  the  least  harmful  results. 

Table  5  states  the  number  of  saloons  in  each  city,  pop- 
ulation per  saloon,  license  rate,  license  income  per  inhab- 
itant, periods  of  license  payment,  restrictions  upon  the 
saloon  district,  and  upon  the  number  of  saloons.  It  is 
usually  accepted  as  true  that  a  high  license  rate  reduces  the 
number  of  saloons  and  increases  the  amount  of  revenue. 
t  While  this  is  a  reasonable  proposition  it  cannot  be  proved 
by  a  comparison  of  the  per  capita  license  income  in  high 
and  low  license  cities.  That  a  city  has  a  high  license  is 
indicative  that  its  population  is  not  given  to  the  large  sup- 


28 


MUNICIPAL  REVENUES  IN  ILLINOIS 


[388 


port  of  saloons,  and  hence  the  number  is  automatically  lim- 
ited. Further,  six  of  the  seven  cities  which  charge  more 
than  $500  for  a  license  place  an  arbitrary  restriction  upon 
the  number  of  licenses  issued. 

TABLE  5. 

NUMBER  OF  SALOONS,  POPULATION  PER  SALOON,  LICENSE  RATE,  AND  OTHER 
DATA  RELATIVE  TO  THE  LIQUOR  TRAFFIC  IN  ILLINOIS  CITIES,  1909. 


£> 
O 

^§ 
.  o 

£3 

&g 

0.°. 

o  a 
CUc/) 

License  Rate 

« 

1.0 

.s| 
38. 

Periods  of 
Payment 

Restriction  of 
District 

Restriction  of 
Number 

Alton  

68 

257 

$500 

1.72 

Annual 

"Usual" 

None 

Aurora    

42 

710 

1000 

1.43 

Semi-ann.3 

Fire  limits 

1000  pop.* 

Belleville    .. 

113 

I87 

500 

2.63 

None 

None 

Bloomington 

76 

339 

600 

1.86 

Quart. 

None 

None 

Danville  .... 

76 

366 

800 

2.39 

Quart. 

Bus.  Section 

500  pop.4 

Decatur1   .  .  . 

48 

648 

1000 

i-54 

Semi-ann. 

Bus.  Section 

None 

E.  St.  Louis. 

343 

171 

500 

2.65 

Quart. 

"Discretion 

None 

of  Mayor" 

33  for  25,000 

Elgin   

34 

764 

IOOO 

i.3i 

Semi-ann. 

Fire  limits 

I  per 

1,000  add. 

Freeport  .  .  . 

46 

382 

500 

1-30 

Bus.  Section 

None 

Joliet  

136 

255 

IOOO 

3-92 

"Usual" 

500  pop.4 

LaSalle   .... 

57 

202 

500 

2.70 

Annual 

6 

250  pop.4 

Moline  

63 

384 

IO02 

2.60 

Semi-ann. 

None 

500  pop.4 

Ottawa    

49 

194 

500 

2.65 

Quart. 

None 

49  Saloons 

Peoria   

300 

223 

600 

•  05 

Quart. 

None 

400   pop.4 

Quincy  

145 

252 

500 

.98 

Rockford1  .. 

50 

908 

IOOO 

•  14 

Semi-ann. 

Bus.  Section 

looo  pop.4 

Rock  Island. 

96 

253 

500* 

•97 

Semi-ann. 

None 

None 

Springfield   . 

200 

258 

500 

.10 

Annual 

"Usual" 

None 

Streator  

65 

219 

500 

.87 

Quart. 

66  Saloons 

"1910 — "Dry"  during  period  studied. 

2Now  $600. 

'Bond  given  for  last  installment. 

4Limit  will  become  operative  only  when  population  increases. 

'No  saloons  in  residence  district  except  those  already  there. 


389]  LICENSES  AND  POLICE  FINES  29 

Ten  of  eighteen  cities  so  restrict  the  number  of  licenses 
issued,  eight  of  these  limiting  upon  the  basis  of  population. 
In  most  cases,  however,  the  number  of  saloons  exceeds  the 
number  the  restriction  would  normally  allow,  and  there 
must  be  a  large  increase  in  population  before  there  can  be 
an  increase  in  liquor  shops.  In  Elgin  and  Decatur  an 
arbitrary  minimum  of  saloons  was  fixed,  any  increase  to 
follow  an  increase  in  population.  In  each  instance  of  re- 
striction of  number,  the  licenses  already  issued  assume  a 
monopoly  value.  Since  the  municipality  has  limited  its 
own  income  incidental  to  this,  it  appears  reasonable  that 
such  increment  should  be  turned  to  the  city  treasury.  An 
example  of  such  loss  accompanying  the  limiting  of  the 
number  of  saloons  is  found  in  LaSalle,  where  the  number 
was  decreased  from  66  to  t>7,  involving  a  shrinkage  in 
license  fees  of  $4500.  A  similar  decrease  in  income  was  ex- 
perienced in  Rockford,  which  city  actually  restricted  the 
number  of  saloons  to  one  for  each  900  inhabitants;  while 
Decatur,  a  city  with  a  similar  class  of  citizens  and  a  similar 
attitude  toward  the  liquor  question,  supports  one  saloon 
for  each  600  people.3  On  this  basis  the  former  city  was  los- 
ing by  restriction  of  the  number  of  licenses  the  revenue  of 
twenty  saloons,  or  |20,000.  As  the  saloons  established 
were  approximately  transacting  the  business  which  might 
be  done  by  twenty  more,  they  should  bear  the  loss  incurred 
by  the  city  by  reason  of  the  monopoly  allowed.  This  would 
raise  the  license  rate  in  Kockford  to  $1400  per  year.4 

More  than  one-half  of  the  cities  studied  restrict  the 
license  district  to  the  fire  limits  or  to  the  business  district. 
In  the  others  the  only  check  upon  location  is  the  usual  leg- 
islative provision  concerning  frontage  signatures.  Saloons 
in  the  residence  districts  naturally  increase  the  license  reve- 
nues, but  have  many  objectional  features  in  addition  to 
necessitating  a  direct  increase  in  the  police  force. 

t  3Both  cities  went  "no  license"  in  1908;  have  since  gone  "wet"  and 
enacted  stringent  laws  regarding  the  sale  of  liquor.  Rockford  in  1912 
again  reversed  its  position. 

4Similarily  an  equitable  license  rate  in  Elgin  would  be  $1175;  and  in 
Aurora  $1100. 


30  MUNICIPAL  REVENUES  IN  ILLINOIS  [390 

Of  fifteen  cities  two  require  that  the  license  fee  be 
paid  annually;  six,  semi-annually ;  and  the  remainder, 
quarterly.  Under  a  system  by  which  cities  do  not  receive 
interest  upon  their  funds  on  deposit,  there  is  little  object 
in  requiring  that  the  license  payment  be  made  at  the  be- 
ginning of  the  year.  However,  the  interest  upon  the  con- 
siderable sums  of  license  money  would  amount  to  several 
hundred  dollars  per  year  for  each  city,  were  licenses  paid 
at  the  beginning  of  the  year  and  interest  collectable. 

It  has  been  mentioned  that  the  law  requires  licenses 
to  be  paid  for  in  advance.  In  Chicago,  thru  neglect  to 
enforce  this  provision,  losses  were  formerly  large.5  Sa- 
loons neglected  prompt  payment,  and  if  going  out  of  busi- 
ness paid  only  a  prorata  for  the  time  open.  In  the  smaller 
cities  of  the  state  this  is  never  the  case.  Of  nineteen  cities, 
sixteen  require  that  the  fee  be  paid  strictly  in  advance ;  two, 
(Ottawa  and  Kock  Island)  allow  from  a  few  days  to  a 
week  of  grace,  and  in  only  one  city  (Springfield)  were 
payments  reported  seriously  in  arrears. 

Nor  do  refunds  make  any  considerable  inroads  into  the 
sums  collected.  Five  cities  reported  refunds  of  saloon 
licenses:  Rockford,  to  the  amount  of  $478;  Rock  Island, 
$250;  and  Peoria,  $1083.6  This  last  city  refunds  only  in 
case  of  unavoidable  accidents, — "an  act  of  God".  Spring- 
field refunds  for  the  same  reason;  Decatur  also  refunds; 
but  in  these  last  two  cities  the  refunded  amounts  could  not 
be  obtained. 

General  Licenses. 

The  authority  to  require  other  licenses  as  a  means 
of  revenue  is  also  derived  from  the  constitution.  The 
legislature  is  granted  the  power  to  tax  by  general  law, 
peddlers,  auctioneers,  brokers,  hawkers,  merchants,  com- 
mission merchants,  show  men,  jugglers,  inn  keepers,  and 
grocery  keepers;  toll  bridges  and  ferries;  insurance  brok- 
ers; telegraph  and  express  interests;  vendors  of  patent 

'Merriam,  Municipal  Revenues  of  Chicago,  p.  115. 
'Includes  refunds  of  taxes. 


391]  LICENSES  AND  POLICE  FINES  31 

medicines;  and  persons  owning  and  using  franchises  and 
privileges.7  Such  taxation  is  definitely  authorized  by  law 
for  purposes  of  revenue,  and  hence  is  not  dependent  for  its 
legality  upon  police  powers. 

By  a  series  of  acts,  the  legislature  has  authorized  mu- 
nicipal licensing  of  nearly  every  occupation  which  par- 
takes of  a  public  or  quasi-public  character,  enjoys  special 
privileges,  or  requires  police  supervision.8  It  is  imprac- 
tical to  make  an  accurate  calculation  of  the  value  of  a 
privilege  which  an  occupation  may  enjoy,  but  such  occu- 
pations are  the  object  of  an  easily  imposed  and  collected 
tax.  Expediency  in  taxation  is  frequently  paramount  to 
absolute  justice.  In  any  event  the  incidence  of  license 
taxes  is  often  shifted  to  some  extent,  and  in  all  probability 
works  no  greater  injustice  than  other  frequent  forms  of 
taxation. 

By  statute  cities  have  acquired  the  right  to  license, 
regulate  and  suppress  the  following  occupations  and  busi- 
nesses,9— wharf  boats  and  tugs  used  about  harbors  or 
within  the  jurisdiction  of  the  same;  hawkers,  peddlers  and 
pawnbrokers;  keepers  of  ordinaries,  theatrical  and  other 
exhibitions,  shows  and  amusements,  billiard  and  pool 
tables;  bowling  alleys;  and  transient  vendors  of  merchan- 
dise.10 

The  privilege  of  peddling  merchandise  is  given  to 
ex-union  soldiers  free  of  charge  upon  demand  and  after 
presentation  of  proof  of  army  service;11  and  every  farmer, 
fruit  and  vine  grower  has  the  right  to  sell  his  own  pro- 
duce where  such  articles  are  usually  sold  without  a  city 

'Const.  Art.  9,  par.  i. 

*"Altho  a  constitution  grants  to  a  legislature  the  power  to  impose 
certain  classes  of  occupational  taxes  which  are  enumerated,  it  may  dele- 
gate to  municipal  bodies  the  power  to  impose  for  municipal  purposes, 
taxes  which  are  not  included  in  the  constitutional  enumeration."  Wiggins 
v.  Chicago,  6  III.  372. 

"The  courts  have  held  that  the  legislature  may  delegate  its  power  to 
the  local  authorities  by  general  law.  See  B'raun  v.  Chicago,  no  III.  190. 

™Rev.  Stat.  ch.  24,  par.  62,  items  35,  41  et  seq. 

^Ibid  ch.  24,  par.  651. 


32  MUNICIPAL  REVENUES  IN  ILLINOIS  [392 

license,  any  ordinance  to  the  contrary  notwithstanding.12 
The  streets,  however,  must  not  be  obstructed  nor  the  liquor 
laws  violated.  The  licensing  of  houses  of  prostitution  or 
the  medical  inspection  of  the  same  is  expressly  forbidden. 

Municipalities  are  granted  the  right  to  license  and  to 
regulate,  but  not  to  suppress,  in  the  following  instances, — 
runners  for  stages,  cars  and  public  houses;  wagons  and 
other  vehicles  conveying  loads  within  the  city,  or  any  par- 
ticular class  of  such  wagons  and  other  vehicles,  and  to 
prescribe  the  width  of  tire  for  the  same;13  hackrnen,  dray- 
men, omnibus  owners,  carters,  cabmen,  porters,  express- 
men, and  all  others  employed  in  like  occupations,  and  to 
prescribe  their  compensation;  second-hand14  and  junk 
stores,  and  to  forbid  them  from  purchasing  and  receiving 
from  minors;  auctioneers;  distillers  and  brewers;  lumber- 
yards, livery  stables,  public  scales,  blacksmith  shops, 
foundries,  and  brokerage  shops.  Dogs  may  be  taxed  and 
restrained.  Elevator  operators  and  plumbers  may  also 
be  examined  and  licensed,  and  an  additional  license  may 
be  imposed  upon  plumbing  establishments.15  The  license 
fee  on  vehicles  when  collected  must  be  kept  in  a  separate 
fund  and  used  only  for  paying  the  cost  and  expense  of 
street  and  alley  improvement  and  repair.16 

Foreign  insurance  companies  are  required  "upon  de- 
mand to  pay  into  the  treasuries  of  the  cities  in  which  they 
have  agents,  not  more  than  two  percent  of  the  gross  re- 
ceipts upon  the  insurance  in  force  within  the  boundaries 
of  the  municipality.17 

Not  all  of  the  license  income  received  is  turned  into  the 
general  treasury  of  the  city  collecting  it.  In  municipalities 
having  more  than  50,000  inhabitants  the  firemen's  relief 
fund  is  the  recipient  of  one-half  of  the  fire  insurance 

"Rev.  Stat.  ch.  5,  par.  23. 
"Ibid  ch.  24,  par.  62,  items  43,  96. 

"Does  not  include  book  stores.     Eastman  v.  Chicago.    79  III.  17.8. 
**Rev.  Stat.  ch.  24,  par.  62,  item  42  et  seq. 

MFor  constitutionality  see  Harder's  Fire  Proof  Storage  and  Van  Co. 
v.  Chicago.    235  III  58. 

"Rev.  Stat.  ch.  24,  par.  423. 


393]  LICENSES  AND  POLICE  FINES  33 

tax.18  Also  the  police  pension  fund  in  such  cities  is  made 
up  in  part  of  three-fourths  of  the  dog  tax,  three  percent 
of  all  other  city  licenses  up  to  $2500,  and  the  fines  from 
the  violation  of  the  police  ordinances.  In  cities  of  smaller 
size  the  police  pension  fund  consists  in  part  of  three,- 
fourths  of  the  dog  tax,  two  percent  of  the  saloon  licenses 
(upon  vote  of  the  citizens),  ten  percent  of  the  city  ordin- 
ance fines  and  ten  percent  of  all  other  licenses,  the  total 
not  to  amount  to  more  than  $2500  in  a  year.19 

Table  6  is  a  statement  of  the  total  income  from  all 
licenses  (except  wheel  and  insurance  taxes)  for  the  year 
1909  in  the  cities  under  consideration ;  of  this  income  classi- 
fied according  to  the  more  important  sources;  and  of  the 
per  capita  income  excepting  that  from  saloons.  Where  the 
income  is  not  separated  into  its  several  sources  the  informa- 
tion was  not  available.  The  division  of  "other  licenses" 
consists  of  scattering  miscellaneous  licenses  and  the  more 
important  business  taxes  which  are  considered  later. 

The  most  striking  feature  of  the  table  is  the  wide 
variation  in  the  percapita  income  from  general  licenses 
which  ranges  from  as  low  as  four  cents  per  person  in 
Ottawa,  to  thirty-five  cents  in  East  St.  Louis. 

The  largest  of  these  variations  is  accounted  for  by  the 
collection  of  business  taxes  in  certain  cities,  but  the  vari- 
ation among  others  is  sufficient  to  demonstrate  the  desira- 
bility of  systematic  licensing  and  collection. 

It  is  evident  that  general  licenses  can  be  depended 
upon  to  contribute  annually  from  $1000  to  $5000  of  the 
municipal  income  providing  there  is  a  proper  system  of  levy 
and  collection.  Unfortunately  no  plan  has  been  advanced 
to  insure  payment,  other  than  that  of  tagging,  which  can 
be  employed  only  in  special  cases.  In  frequent  instances 
the  enforcement  of  certain  licenses  has  been  allowed  to 
lapse  entirely.  An  example  of  this  is  the  tax  on  dogs, 
which  if  effectively  applied  will  produce  $1000  a  year  in 
cities  of  even  moderate  size.  In  Rockford  the  tax  is  author- 

"Rev.  Stat.  ch.  24,  par.  382. 
"Rev.  Stat.  ch.  24,  par.  391. 


34 


MUNICIPAL  REVENUES  IN  ILLINOIS 


[394 


TABLE  6 
TOTAL  AND  PER  CAPITA  INCOME  FROM  LICENSE  TAXES,  ILLINOIS  CITIES,  1909 


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Alton  

$.31 

$36,173 

$30,684 

$    37 

$370 

$265 

$1,106 

$    75 

None1 

$3,634 

Aurora    .  . 

.10 

45,974 

42,824 

935 

None 

4OO 

$    230 

1,585 

Belleville  . 

.18 

60,442 

55,691 

1  20 

246 

718 

804 

240 

None1 

2,621 

Bloom'n   .. 

•17 

52,549 

47,900 

180 

5i8 

1,130 

None 

705 

455 

1,659 

Champ'n   . 

.16 

1,994 

None 

None 

583 

1,040 

None 

161 

201 

None 

Danville   . 

.11 

70,645 

66,600 

None 

900 

306 

None 

755 

no 

904 

Decatur  ... 

.10 

3J9I 

None 

None 

762 

410 

375 

1,361 

263 

1,483 

E.  St.  Lo's 

•35 

179,809 

155,410 

798 

861 

120 

2,081 

4,295 

None1 

16,243 

Elgin    

.12 

37,114 

34,000 

870 

Evanston  . 

.22 

5,510 

None 

2,187 

Freeport  .. 

.11 

25,160 

None 

4.87 

542 

Galesburg 

.10 

2,529 

None 

238 

Jack'ville... 

•05 

876 

None 

None 

250 

520 

None 

None 

106 

Joliet    

.07 

139,045 

136,000 

160 

550 

919 

666 

320 

101 

1,075 

LaSalle   ... 

•13 

34,400 

33,110 

None 

265 

None 

260 

370 

87 

308 

Moline    .... 

.14 

66,226 

63,126 

370 

3,130 

Ottawa  .... 

.04 

25,680 

25,250 

90 

no 

Peoria  

.18 

149,300 

137,307 

1,144 

1,587 

.  925 

1,940 

1,674 

538 

3,141 

Quincy  

^21 

80,091 

72,500 

1,928 

Rock  ford  . 

.09 

4,056 

None 

Rock  Isl'd 

.14 

51,697 

48,025 

90 

965 

56o 

176 

868 

243 

770 

Springf'd 

•14 

115,604 

108,435 

613 

851 

96 

None 

609 

317 

4,682 

Streator  ... 

.06 

27,764 

26,750 

None 

225 

340 

103 

90 

256 

Urbana   ... 

•05 

405 

None 

None 

100 

'Included  in  wheel  tax. 

Absence  of  data  does  not  necessarily  signify  that  no  such  tax  is 
required,  but  may  mean  that  the  amount  collected  was  so  small  as  to  be 
reported  under  "other  licenses." 


395]  LICENSES  AND  POLICE  FINES  35 

ized,  but  the  ordinance  is  a  "dead  letter".  Such  a  condi- 
tion is  better,  however,  than  the  unequal  enforcement  of 
the  law  in  Ottawa,  Galesburg,  Streator,  and  more  strik- 
ingly in  Rock  Island.  Each  of  these  cities  except  Streator 
has  a  larger  population  than  Freeport,  yet  no  one  of  them 
received  an  amount  from  dog  taxes  equal  to  half  that 
collected  in  the  last  named  city. 

On  the  other  hand,  an  example  of  a  license  which  is 
almost  uncollectable  is  that  on  hotel  "runners"  or  porters. 
Peoria,  with  its  numerous  hotels,  received  three  dollars  in 
1909  from  this  source.  In  Rockford  no  attempt  is  made  to 
enforce  the  licensing  ordinance.  A  license  tax  of  this  na- 
ture may  be  classed  with  those  frequently  intricate  ord- 
inances taxing  peddlers,  hawkers  and  auctioneers.  In 
Urbana  an  ordinance  of  this  kind  by  a  complicated  classi- 
fication of  the  goods  sold,  method  of  transporting  them  and 
the  length  of  time  the  permission  is  to  continue,  invites 
non-enforcement  by  its  complexity. 

Table  7  is  a  compilation  of  the  principal  licenses  and 
the  rates  imposed  in  the  twenty-four  cities  under  consider- 
ation. The  field  is  very  wide ;  yet  from  the  point  of  view  of 
revenue  only  a  few  occupations  furnish  any  considerable 
income.  The  most  important  sources  are  baggage  and  ex- 
press wagons,  billiard  and  pool  halls,  druggists,  pawn- 
brokers, junk  and  second  hand  stores,  and  theatres  of  all 
types.  These  industries  have  been  long  subject  to  license 
taxation,  and  a  review  of  the  city  reports  shows  that 
licenses  of  this  kind  form  the  backbone  of  the  license 
income.  The  businesses  are  permanent;  the  burden  of  the 
tax  can  be  shifted  in  most  cases  only  upon  the  well-to-do ; 
and,  what  is  more  important,  the  taxes  are  easily  collect- 
able. The  remainder  of  the  occupations  subject  to  licensing 
are  of  less  permanent  character,  or  of  such  a  nature  that 
a  heavy  license  would  be  oppressive.  Under  such  condi- 
tions license  taxation  is  most  successful  if  concentrated  on 
a  few  occupations  where  the  returns  will  be  productive, 
rather  than  scattered  over  a  variety  of  trades  at  low  rates. 


36 


MUNICIPAL  REVENUES  IN  ILLINOIS 


[396 


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LICENSES  AND  POLICE  FINES 


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38  MUNICIPAL  REVENUES  IN  ILLINOIS  [398 

Whether  a  heavy  license  should  be  imposed  upon  the 
baggage  and  express  business  is  questionable.  The  in- 
dustry makes  special  use  of  the  city  streets,  for  which 
payment  may  be  expected;  at  the  same  time  it  serves  as  a 
refuge  for  a  class  of  broken  down  men  who  frequently  earn 
only  a  bare  livelihood. 

A  heavy  license  tax  on  billiard  and  pool  tables  and 
upon  bowling  alleys  is  a  profitable  source  of  revenue.  A 
number  of  cities  charge  only  $5  per  table,  while  in  Danville 
the  tax  falls  as  low  as  $2.50  per  table,  the  annual  income 
being  only  a  trifle  over  $300.  Evanston,  Joliet  and  Peoria 
charge  large  sums  for  the  privilege  of  conducting  these 
businesses,  a  practice,  which,  while  it  gives  a  monopoly  to 
a  few  places,  makes  collection  easy.  Only  a  quarter  of  the 
cities  charge  more  than  $5.00  per  table  which  sum  with  a 
view  to  revenue  is  too  small. 

On  bowling  alleys  the  prevailing  licenses  are  $10  and 
$15  per  alley,  altho  in  Freeport  the  charge  is  as  low  as 
$5  per  year.  Where  a  charge  is  made  for  the  business 
rather  than  by  the  alley,  the  rates  are  much  lower.  In 
Evanston  such  charge  is  $200,  but  the  next  highest  rate  is 
$25,  which  prevails  in  three  cities.  In  two  other  munici- 
palities the  business  rate  falls  as  low  as  $10. 

The  druggist  license  is  usually  a  small  fee  for  permis- 
sion to  sell  liquor,  presumably  for  medicinal  purposes,  al- 
tho this  restriction  is  notoriously  violated.  The  predom- 
inating license  rates  are  $15  and  $25  dollars  per  year.  In 
two  instances,  however,  it  is  $5.00  and  in  one  case  only  one 
dollar.  In  Bloomington  there  is  an  occupational  tax  of 

FOOTNOTES  TO  TABLE  7. 

f— Sale  forbidden,  but  'Circus  bill   posters  $5.00  per  day. 

ordinance    not   enforced.  "not  now  enforced, 

n — no  data.  'Fee  only. 

x — taxed   under   other  classification.  "Occupational  tax  on  all  pharmacists, 

a — larger  sum   for  first  table,  "Not  enforced. 

smaller  for  each  add.  "Any  place  where  milk  is  sold. 

y — year.  "$2.50  per   100  scale  tickets,  which 
d — day.  sell    for    $10. 

w — week.  "Per  wagon, 

m — month.  "An  initial  franchise  tax. 

JA  blank  means  not  taxed.  "Grade   one. 

2By  other  than   auctioneer.  MOn  city   property. 

'Total  business.  "$10.00   per  wagon   additional. 
*Per  table  unless  otherwise  designated. 


399]  LICENSES  AND  POLICE  FINES  39 

flO.OO  per  year  upon  all  pharmacists.  On  the  whole  the 
drug  license  is  widely  used  and  generally  collected,  but  is 
not  as  large  as  the  nature  of  the  drug  business  justifies. 

Pawn  shops,  junk  and  second  hand  stores  form  a  class 
by  themselves,  the  licensing  of  which  is  largely  a  police 
measure.  Pawn  shops  require  an  amount  of  police  super- 
vision and  the  rate  of  taxation  is  necessarily  high  in  order 
to  limit  the  number.  Junk  shops  are  licensed  with  a 
view  to  police  regulation,  but  the  object  would  perhaps  be 
better  secured  by  extending  the  licensing  to  the  wagons 
used  in  collection  rather  than  upon  the  warehouses,  and 
there  would  result  an  increase  of  revenue. 

Theatres  are  perhaps  the  most  unevenly  taxed  busi- 
ness of  the  group, — the  license  rate  in  cities  of  the  same  size 
ranging  from  $25  to  $150.  The  predominant  rate  is  from 
$50  to  $100,  altho  six  cities  charge  more  than  this  latter 
figure.  The  moving  picture  show  is  highly  taxed  in  most 
localities,  the  business  being  supposedly  profitable  and  re- 
quiring increased  fire  protection. 

Brewers,  brewery  agents  and  wholesale  liquor  dealers 
are  not  as  extensively  or  as  heavily  levied  upon  as  the 
nature  of  their  business  would  seem  to  justify.  Since 
retail  liquor  dealers  are  taxed  from  $500  to  $1200,  it  ap- 
pears but  reasonable  that  wholesale  dealers  should  con- 
tribute more  than  $25,  as  is  the  case  in  Rock  Island  and 
Quincy.  Also  if  a  business  is  of  such  a  nature  that  it  is 
taxed  $300  per  year  in  one  city,  it  is  questionable  if  it 
should  be  exempt  from  taxation  in  others. 

Itinerant  merchants,  licensed,  in  some  cities,  from  $25 
to  $100  per  month,  are  in  other  cities  escaping  with  less 
than  a  reasonable  charge.  It  cannot  be  said  that  their 
presence  promotes  a  healthy  growth  of  home  industries;  or 
is  entirely  lacking  in  the  need  of  police  supervision;  nor 
are  they  subject  to  the  general  property  tax.  Perhaps  in 
this  instance  a  much  higher  license  than  that  which  the 
municipalities  are  assessing  would  be  expedient  upon  the 
grounds  both  of  revenue  and  of  public  policy. 

Milk  wagons  in  all  but  seven  of  the  cities  pay  a  nom- 


40  MUNICIPAL  REVENUES  IN  ILLINOIS  [400 

inal  fee  to  facilitate  inspection.  In  two  instances,  Peoria 
and  Rock  Island,  the  licenses  apply  to  all  places  where 
milk  is  sold.  The  usual  rate  is  $5  per  year,  tho  it  is  as  high 
as  f  15  in  Alton,  and  falls  to  $1  in  Freeport  and  Rockford. 
The  total  revenue  is  not  large,  but  should  be  sufficient  to 
cover  the  costs  of  inspections  and  testing. 

The  high  cigarette  license  tax  is  normally  imposed  with 
a  view  to  decreasing  the  sales.  It  usually  results  in  giving 
a  single  merchant  a  cigarette  monopoly,  as  was  originally 
true  in  Rockford ;  or  for  several  dealers  to  take  out  licenses 
at  a  loss, — in  which  case  the  tax  is  really  one  upon  the 
retail  tobacco  business.  Or  a  large  tax  may  prevent  any 
dealer  taking  a  license,  in  which  case  the  ordinance  ia 
widely  violated.  This  situation  was  found  in  both  Ottawa 
and  Rockford.  A  more  reasonable  license  than  that  now 
imposed  in  the  five  cities  licensing  the  sale  of  cigarettes, — 
possibly  $50  per  year, — would  prevent  the  indiscriminate 
sale  by  small  dealers  and  grocers,  and  would  materially  re- 
duce or  eliminate  evasions  of  the  law  by  tobacco  dealers. 
The  result  would  be  a  $50  tax  on  the  retail  tobacco  business, 
tho  it  would  have  the  appearance  of  an  optional  payment. 

In  addition  to  the  licenses  enumerated  in  table  7  there 
are  numerous  others  which  are  operative  in  only  a  few 
cities.  A  complete  list  would  include  striking  machines 
at  $1  and  $10  a  day  in  Aurora  and  Urbana  respectively; 
ice  cream  wagons,  $5  in  Belleville;  street  cars  in  several 
cities  ;20  solicitors  for  merchants,  at  $50  in  East  St.  Louis ; 
mechanical  clocks  at  $2.50  in  Aurora ;  distilled  water  deal- 
ers, $5  in  Evanston;  awning  manufacturers,  $25  in  Joliet 
and  Peoria,  or  at  $10  when  more  than  one  person  shall  be 
engaged  in  the  business;  keepers  of  gunpowder,  $3  in 
Galesburg ;  and  the  penny  arcades  in  several  municipalities, 
either  by  specific  designation  or  under  the  classification  of 
general  amusements. 

Cities  are  also  permitted  to  examine  and  license 
plumbers,  the  fee  being  $50  for  master  plumbers,  and  $1 

MSee  Public  Service  Privileges,  ch.  IV. 


401]  LICENSES  AND  POLICE  FINES  41 

for  journeymen;  and  to  renew  the  same  annually  for  $10 
and  $2  respectively.21  In  Bockford  examination  and  re- 
newals returned  $481,  or  $449  net,  which  "as  has  always 
been  the  custom  was  divided  equally  among  the  three 
members  of  the  board".22  Electricians  pay  an  annual 
license  of  $5  in  Peoria,  the  total  income  from  this  tax  being 
$501.  Aside  from  these  mentioned,  and  single  instances 
of  a  tax  on  bakers  and  pharmacists,  occupational  licensing 
has  made  little  progress  in  the  cities  of  Illinois. 

The  business  of  plumbing  pays  $10  license  in  Decatur, 
Ottawa,  LaSalle,  Bloomington,  and  $20  in  Moline.  Drain 
layers  are  licensed  at  $10  in  Kockford  and  Peoria. 

Business  Taxes. 

It  is  not  always  easy  to  distinguish  between  the  ob- 
jects of  business  taxation  and  general  licensing  tho  it  is 
desirable  to  discuss  them  separately.  Certain  trades,  as 
druggists,  pawnbrokers,  second  hand  dealers,  junk  shops, 
etc.,  have  been  long  subject  to  licensing  and  by  nature 
seem  to  invite  public  supervision.  On  the  other 
hand,  other  businesses  have  no  special  characteristics 
which  justify  licensing  and  taxation  unless  such  taxes  are 
imposed  on  all.  Licensing  within  this  group  is  justified 
only  by  the  requirement  of  revenue,  and  the  desirability 
of  an  easily  assessed  and  collected  tax. 

The  statutes  are  sufficiently  broad  to  permit  the  licens- 
ing of  almost  any  business  which  the  city  authorities  may 
think  necessary,23  yet  the  practice  of  business  taxation 
has  been  extended  in  only  a  limited  radius  from  East  St. 
Louis.  This  city  apparently  borrowed  the  practice  from 
its  Missouri  namesake.  Table  8  is  an  exhibit  of  the  rates 
of  business  taxes  and  the  total  amounts  received  by  each 
city  from  this  source  for  the  year  1909.  East  St.  Louis, 
Springfield,  Belleville,  and  Alton  are  the  only  municipali- 
ties receiving  a  considerable  revenue  from  this  source, 

"Laws  of  1909,  p.  132. 

"Annual  Report  of  Rockford,  1909,  p.  88. 

"Rev.  Stat.  ch.  24,  par.  62,  item  95  et  seq. 


42 


MUNICIPAL  REVENUES  IN  ILLINOIS 


[402 


although  several  other  cities  license  an  occasional  trade. 
The  most  productive  license  is  that  on  butcher  shops,  which 
in  Alton  paid  $1988  during  1909.  In  the  same  city,  livery 
stables  and  lumber  yards  contributed  $125  for  each  class, 
and  restaurants  $282. 

In  Belleville  the  most  important  of  the  business  taxes 
was  that  upon  vendors  of  provisions,  the  return  being  $720. 
Vendors  of  bread,  fruit,  etc.,  paid  $355 ;  real  estate  brokers 
paid  $337;  and  livery  stables,  $100.  In  East  St.  Louis 

TABLE  8. 
BUSINESS  TAXES,  RATES  AND  TOTAL  INCOME,  1909. 


<L> 

'3 
o 

§ 

1 

•£ 

c 

2 

JK 

C/} 

c3 

•ti 

.~ 

^ 

.s 

•? 

*w 

> 

*Q 

§ 

0 

o< 

CQ 

W 

W 

OH 

C/5 

Awning  man'f'g  

$    25 

$    25 

Bakeries   

$      10 

j;    25 

51 

Brokers,  general   

200 

$    25 

Brokers,  real  estate  .  . 

25 

25 

25 

Coal  dealers   

25 

10 

Fire  works,  retail  

3 

Fire  works,  wholesale 

15 

Groceries    

IO 

25 

Hay  and  grain  

25 

Ice  dealers   

25 

$5* 

IO2 

I0*~5 

10 

Hotels 

15 

Livery  stables  

$    25 

25 

50 

2.50' 

25 

Lumber  yards  

$    25 

50 

25 

50 

Meats,  retail  

IOO 

IO 

So4 

5 

25 

Meats,  wholesale  

IOO 

Restaurants    

10 

15 

2 

15 

Storegoods  

10 

25 

Undertakers    

10 

10 

Total  income  

$2520 

$2368 

£14611 

No 

$  185 

$  176 

$  135 

$3757 

Data 

1Per  person. 
*Per  wagon. 
*Per  rig. 


4Now  $25. 
"Not  enforced. 


403]  LICENSES  AND  POLICE  FINES  43 

butcher  shops  paid  f  5100 ;  grocery  stores,  $4408 ;  "vendors 
of  store  goods",  $1387;  coal  and  ice  dealers,  $895;  real 
estate  brokers,  $719 ;  and  hay  and  grain  dealers,  $268.  The 
remaining  business  licenses  in  the  city  produce  less  than 
$250  each.  Meat  dealers  are  the  most  important  contrib- 
utors to  the  business  tax  fund  in  Springfield,  retail  dealers 
paying  $1417,  and  wholesale  dealers  $908.  Lumber  yards 
are  next  in  rank,  contributing  $305 ;  restaurants  pay  $250 ; 
lunch  rooms,  $248;  and  real  estate  brokers,  $168.  The  re- 
maining businesses  pay  less  than  $100  each. 

The  other  cities  enumerated  in  Table  8  cannot  be  said 
to  practice  business  licensing  for  revenue  purposes.  In 
Evanston  only  lumber  yards  are  taxed  sufficiently  to  pro- 
duce a  reasonable  revenue,  the  other  business  taxes  ap- 
pearing to  be  of  a  regulatory  nature.  The  license  of  awn- 
ing manufacturers  in  Joliet  and  Peoria  is  unimportant, 
and  the  tax  on  ice  wagons  is  apparently  regulatory. 

In  this  connection  attention  may  be  called  to  the  $2 
tax  on  restaurants  in  Evanston ;  and  a  similar  license  pro- 
posed in  Urbana.  Both  of  these  cities  forbid  the  licensing 
of  saloons  and  consequently  have  found  it  necessary  to 
extend  police  supervision  to  restaurants  to  prevent  the 
illicit  sale  of  liquor. 

The  four  cities  which  have  extensively  adopted  busi- 
ness taxation  find  it  a  profitable  source  of  revenue.  Its 
general  introduction,  however,  would  probably  meet  with 
such  opposition  as  to  make  wide  adoption  impossible. 

Vehicle  Licenses. 

A  recent  amendment  to  the  general  incorporation  act 
for  cities  provides  that  municipalities  may  "direct,  license 
and  control  all  wagons  and  other  vehicles  conveying  loads 
within  the  city,  or  any  particular  class  of  such  wagons  and 
other  vehicles,  and  prescribe  the  width  of  tires  of  the  same, 
the  license  fee  when  collected  to  be  kept  in  a  separate  fund 
and  used  only  for  paying  the  costs  and  expense  of  street  and 
alley  repair".24 

"Rev.  Stat.  (1908),  ch.  24,  par.  62,  item  96. 


44 


MUNICIPAL  REVENUES  IN  ILLINOIS 


[404 


Eight  out  of  the  twenty-four  cities  under  discussion 
have  placed  upon  vehicle  owners  part  of  the  cost  of  repair- 
ing streets  which  are  built  entirely  by  the  property  owners. 
Ordinances  establishing  vehicle  licenses  meet  with  con- 
siderable opposition  and  have  been  considered  unfavorably 
in  at  least  three  cities,  Decatur,  Kockford  and  Springfield. 

TABLE   9. 
VEHICLE  LICENSES,  RATES  AND  TOTAL  INCOME,  1909. 


<u 

1 

V 

jg 

g 

Jrf 

4> 

o 

1 

1 

t 

O 

|  1 

IS 
o 

g 

& 

V 

O 

£ 

a 

O     3 

o  •—  « 

|  | 

o 

| 

I 

0 

H 

p 

o 

S   ° 

"5  g 

<  •§ 

< 

1 

*s 

Alton    

$2 

$  2-5 

$5 

$      5 

$      5 

$10 

$      10 

$   10 

$ 

$  516 

Aurora  .... 

I 

Belleville   .. 

5 

5 

5 

5 

5 

5 

5 

5 

483 

Decatur  .... 

5 

5 

5 

E.  St.  Louis' 

7.50 

10 

12.50 

15 

7169 

Evanston  .  . 

3 

5 

10 

15 

20 

I21 

20 

30 

3 

8065 

Jacks'nville 

2-3" 

4-10 

IO 

10 

10 

10 

10 

10 

2368 

Moline8  .... 

I 

2s 

3 

4 

5 

10 

15 

2 

8oo« 

Quincy   .... 

I 

2 

7-50 

lo-is4 

2 

3401 

Driver  also  licensed. 

*Based  upon  number  of  horses  and  weight  of  wagon. 

"Delivery  wagons,  $7.50. 

4Six  or  more  passengers. 

"1911. 

'Furniture,  baggage,  and  express  wagons,  $25. 

The  ordinances  which  have  been  passed  indicate  no  uniform- 
ity as  to  what  is  regarded  as  a  reasonable  tax  on  vehicles. 
The  minimum  is  in  Moline  where  the  charges  are  $1  per 
horse,  with  a  uniform  charge  of  $7.50  for  delivery  wagons. 
In  East  St.  Louis  the  minimum  charge  is  $7.50  for  one 
horse  vehicles  with  an  increase  of  $2.50  for  each  additional 
horse.  In  Jacksonville  the  tax  is  based  upon  a  combina- 
tion of  the  number  of  horses  and  weight  of  the  vehicle. 
The  intention  was  to  charge  light  delivery  wagons  $4,  and 
the  maximum  weight  of  vehicles  at  $3  a  year  was  placed  at 


405]  LICENSES  AND  POLICE  FINES  45 

750  pounds.  The  result  was  to  place  most  delivery  wagons 
in  the  three  dollar  class.  Perhaps  such  a  scheme  of  gradu- 
ating the  tax  by  the  weight  of  the  vehicle  is  commendable 
if  proportionate  depreciation  on  pavements  is  to  be  con- 
sidered, but  it  lacks  much  in  simplicity  of  collection. 

It  has  been  impossible  to  separate  the  revenue  returns 
from  the  licensing  of  automobiles  from  that  of  other  ve- 
hicles, tho  doubtless  the  former  contribute  the  larger 
share.  It  is  conceded  that  automobiles  cause  a  considerable 
destruction  of  streets  and  they  have  been  taxed  accord- 
ingly. The  minimum  charge  is  f  5  per  car,  and  the  tendency 
is  to  increase  the  rate  to  ten  dollars  for  other  than  runa- 
bouts, and  one  city  adds  the  class  of  six-passenger  cars. 
The  result  of  the  high  charges  in  Evanston  is  seen  in  the 
large  amount  of  revenue  derived  from  the  vehicle  tax. 
Perhaps  f  20  per  car  would  be  considered  large  in  the  aver- 
age city,  but  it  should  be  remembered  that  the  ownership 
of  an  automobile  is,  or  should  be,  indicative  of  an  ability  to 
bear  taxation.  In  addition  to  the  charge  on  machines, 
Evanston  examines  and  licenses  automobile  drivers,  the 
examination  being  made  by  the  commissioner  of  public 
works.  The  initial  charge  is  f  3,  the  license  being  renew- 
able annually  for  $1. 

The  motorcycle  license  has  been  adopted  by  four  cities 
and  is  more  of  a  police  than  a  revenue  measure,  justified 
by  the  large  increase  in  the  number  of  machines  and  the 
public  danger  arising  from  their  use. 

FOREIGN  FIRE  INSURANCE  TAX. 

Fire  insurance  companies  which  are  not  incorporated 
uiider  the  laws  of  the  state  of  Illinois  are  required  to  pay 
into  the  treasuries  of  the  municipalities  in  which  they 
operate,  not  to  exceed  two  percent  of  the  gross  receipts 
from  insurance  in  force  within  the  city  limits.  The  disposal 
of  this  fund  has  already  been  mentioned,  and  comment 
concerning  it  will  be  confined  to  the  manner  of  collection. 


46  MUNICIPAL  REVENUES  IN  ILLINOIS  [406 

Table  10  is  a  statement  of  the  income  of  each  city 
from  this  source.  In  this  instance,  where  one  would  antici- 
pate almost  uniformity  in  the  percapita  collections,  there 
is  a  large  variation  in  the  income,  the  lowest  being  f.017 
per  person  in  East  St.  Louis,  and  the  highest  f.ll  or  six 
times  that  amount,  in  Peoria. 

TABLE  10. 

TOTAL  AND  PER  CAPITA  INCOME  FROM  THE  FOREIGN  FIRE  INSURANCE 
TAX,  1909. 


City 
Alton  

Total 
Amt. 

$1488 

Per 

Cap. 
$.085 

City 
Jacksonville   .  .  . 

Total 
Amt. 

$1348 

Per 
Cap. 

$.088 

Aurora  

1636 

•OSS 

Joliet  

1984 

.057 

Belleville  
Bloomington  .  . 
Champaign  
Danville 

662 
1093 
1124 
1672 

.025 
.041 
.09 
.06 

LaSalle  
Moline  
Ottawa  
Peoria  

739 
HIS 
912 
7360 

.064 
•58 
.095 
.11 

Decatur 

•»IO2 

.10 

Quincv1 

/  •yjy 

E.  St.  Louis  .  .  . 
Elgin  
Evanston  
Freeport  
Galesburg  

3*v^ 
1200 
II2I 
1472 

1061 
1579 

.017 

•043 
•059 
.06 
.069 

Rockford  
Rock  Island  .  .  . 
Springfield  .... 
Streator  
Urbana  

2248 
1838 
1729 
1159 
327 

•049 
•074 
•034 
.081 
.04 

aAnnual  reports  for  1907  and  1909  make  no  mention  of  this  tax.    May 
be  included  in  "general  licenses". 

In  some  instances,  as  in  East  St.  Louis,  city  officials 
frankly  admitted  that  the  collection  of  the  tax  had  not 
been  pressed.  By  special  action  of  the  city  council  in  Ot- 
tawa in  1909  suit  was  commenced  in  the  justice  court 
against  fifty-six  delinquent  companies,  resulting  in  a  pay- 
ment of  $863.  Rockford,  to  facilitate  the  collection  of  this 
tax,  requires  that  each  insurance  broker  take  out  an  annual 
license,  the  charge  being  $1.  At  the  time  of  issuing  this 
license,  an  affidavit  may  be  required  of  the  foreign  insur- 
ance business  which  the  firm  has  written  during  the  past 
year. 

From  the  figures  it  appears  that  the  normal  collection 
in  each  city  should  fall  between  four  and  eight  cents  per 
person,  and  nearer  the  latter  figure  than  the  former.  Yet 


407]  LICENSES  AND  POLICE  FINES  47 

five  cities  fall  below  the  minimum  figure  suggested  and 
seventeen  below  the  maximum.  The  insurance  tax  will 
furnish  one  of  the  largest  incidental  revenues  to  which  the 
cities  have  access,  if  means  are  found  to  compel  its  pay- 
ment. 

POLICE  FINES. 

The  police  and  local  courts  are  not  important  for  their 
contribution  to  city  revenues  since  the  maximum  in  any 
city  amounts  to  only  4,12%  of  the  whole,  while  the  average 
is  about  1  % .  ( See  Table  31 ).  In  Freeport  the  contribution 
of  the  police  department  is  4.72%  of  the  whole  city  income, 
while  in  Moline  it  falls  to  .236%.  It  is  rather  for  its  wide 
variation  of  return  that  this  branch  of  the  municipal  reve- 
nue deserves  attention.  The  public  safety  is  the  one  de- 
partment of  city  activity  where  administration  is  fashioned 
after  that  of  a  quarter  of  a  century  ago  and  is  still  beset 
with  fees,  charges,  perquisites,  and  not  infrequently  ignor- 
ance. 

A  prisoner  from  the  moment  of  his  arrest  is  in  the 
grasp  of  a  system  of  charges, — a  fee  for  the  officer  who 
makes  the  detention,  a  fee  for  the  prosecuting  attorney, 
costs  for  the  judge  and  jury,  and  a  fine  for  the  city.  And 
the  more  important  of  these  charges  are  dependent  upon 
the  option  of  those  whose  function  it  is  to  assess  them.  In 
one  municipality  a  city  warrant  cannot  be  secured  after 
nine  o'clock  in  the  morning,  if  the  case  is  one  in  which 
either  a  state  or  city  warrant  may  be  issued.  A  city  war- 
rant would  give  the  fine  to  the  city ;  a  state  warrant  gives 
nothing  to  the  city  and  permits  a  larger  fee  to  the  magis- 
trate. If  there  have  been  a  series  of  state  cases  where  no 
cash  fines  have  accrued,  these  will  be  made  up  by  means 
^f  a  heavy  fine  assessed  against  the  next  offender  who  can 
pay.25  The  minimum  charge  assessed  in  a  city  case  would 

"State  cases  may  suffer  by  the  State's  attorney  receiving  fines  in  the 
cases  he  prosecutes.  For  example  the  statutes  provide  that  game  wardens 
shall  receive  one-half  of  the  fines  in  cases  apprehended  by  them.  One 
State's  attorney  refused  to  sanction  such  a  loss  to  his  income  with  the 
result  that  game  law  enforcement  was  at  a  stand  still. 


48  MUNICIPAL  REVENUES  IN  ILLINOIS  [408 

be  a  f  1.00  fine,  plus  $1.80  costs.  In  a  state  case  this  would 
be  $3.05  plus  in  many  cases  a  minimum  attorney's  fee  of 
$5.00.  In  simpler  words,  in  one  city  of  the  state  the  penalty 
of  a  crime  may  be  magnified  four  times  if  the  arrest  is 
made  after  nine  o'clock  in  the  morning.  Under  such  a 
system  the  possibilities  of  connivance  between  the  magis- 
trate and  the  prosecuting  attorney  is  apparent. 

In  Quincy,  state  cases  amount  to  only  7.5%  of  those 
tried;  in  Rockford  they  are  20%  ;  Bloomington  27%  ;  Rock 
Island  37.5%  and  Moline  45%.  It  is  impossible  to  believe 
that  serious  crime  is  six  times  more  prevalent  in  this  latter 
city  than  in  Quincy.  In  one  municipality  the  chief  of  po- 
lice in  his  attempt  to  obtain  equity  for  the  city  by  having 
as  many  prisoners  as  possible  fined  in  the  municipal  court, 
brought  upon  himself  the  wrath  of  the  politicians  in  such 
a  measure  that  he  gave  up  the  task.  To  quote  his  own 
words,  "I  had  to  come  off  second  best".  There  are  at  least 
several  solutions  for  this  problem,  the  most  practical  being 
to  place  the  prosecuting  attorney  upon  a  salary  basis.26 
Tho  the  fines  under  this  system  are  still  lost  to  the  city, 
the  surplus  over  the  salary  will  be  turned  in  to  the  county 
school  fund.  In  Rock  Island,  in  1908,  over  $2,000  was  se- 
cured for  education  in  this  fashion.  Another  remedy  in- 
volves the  more  difficult  task  of  taking  the  police  out  of 
politics. 

Justices  of  the  peace  have  long  been  notorious  as 
dispensers  of  justice  of  a  sort  which  in  Chicago  brought 
upon  them  the  approbrium  of  "justice  shops".  These  of- 
ficers in  that  city  have  now  been  abolished  in  favor  of  the 
municipal  court.  The  evils  of  political  justices  need  no 
recital,  yet  one  city,  East  St.  Louis,  with  over  ten  thousand 
arrests  per  year,  retains  the  system.  Each  morning  the 
culprits  of  the  last  twenty-four  hours  are  religiously  di- 
vided among  the  city  magistrate  and  a  half  a  dozen  jus- 
tices of  the  peace.  In  other  cities  the  city  cases  tried  be- 
fore the  justices  of  the  peace  are  almost  none, — 15  of  1019 
in  Quincy,  1  of  1507  in  Rockford. 

"Rev.  Stat.  Ch.  53,  par.  8a. 


409]  LICENSES  AND  POLICE  FINES  49 

A  reference  to  Table  31  in  the  chapter  on  Conclusions 
will  show  the  proportion  of  each  city's  revenues  which  is 
contributed  by  the  police  department.  This,  however,  is 
scarcely  a  just  method  of  comparison,  since  the  importance 
of  smaller  sums  is  lost  in  the  larger  ones  arising  from  other 
sources.  Also,  both  the  opportunities  for,  and  the  policy 
of,  arresting  is  different  in  each  locality.  In  "dry"  com- 
munities persons  intoxicated  are  usually  apprehended  on 
sight,  while  in  others,  not  until  they  become  decidedly 
offensive. 

That  the  number  of  saloons  directly  influences  the 
number  of  arrests,  and  hence  the  police  income,  is  shown 
both  by  the  size  of  the  police  forces  and  the  population  per 
arrest  in  the  different  cities.  In  the  five  no-license 
cities  the  average  number  of  persons  per  police  officer  is 
1566;  for  the  remaining  cities  there  is  an  average  popula- 
tion of  1168  for  each  officer.  Table  13  also  indicates  that 
there  is  some  correlation  between  the  population  per  sa- 
loon and  the  population  per  police  officer.  This  relation 
holds  true  in  all  but  a  few  instances. 

While  the  presence  or  absence  of  saloons  affects  de- 
cidedly the  number  of  men  required  to  maintain  order,  and 
may  increase  the  number  of  arrests  in  an  individual  city, 
on  the  whole  the  influence  of  the  liquor  traffic  is  not  as 
marked  as  might  be  expected,  for  the  reasons  already 
stated.  In  cities  having  one  annual  arrest  to  twenty  or 
more  inhabitants,  there  is  a  saloon  for  an  average  of  413 
persons;  while  in  cities  making  one  arrest  for  less  than 
twenty  inhabitants,  there  is  a  saloon  for  each  350  persons. 
While  the  former  group  contains  five  no-license  cities,  it 
also  includes  LaSalle,  which  has  the  largest  pro  rata  of 
saloons  of  any  city  studied.  Frequency  of  arrest  is  hardly 
a  \nark  of  good  order  in  a  city,  or  a  criterion  of  an  efficient 
police  force.  A  large  income  from  police  sources  may  indi- 
cate that  undesirable  and  unlawful  businesses  are  allowed 
to  play  their  trades  thru  the  payment  of  fines  as  tribute. 

Perhaps  a  more  satisfactory  method  of  judging  police 
revenue  would  be  a  comparison  of  the  income  per  arrest 


50  MUNICIPAL  REVENUES  IN  ILLINOIS  [410 

in  the  several  cities.  This  sum  ranges  from  nothing  in 
Joliet  and  twelve  cents  in  East  St.  Louis,  to  $5.51  in  Free- 
port.  The  method  of  collection  in  East  St.  Louis  has  been 
commented  upon,  and  furnishes  some  explanation  for  so 
small  a  return.  On  the  other  hand,  Alton,  Aurora  and 
Jacksonville  must  be  excluded  for  purposes  of  actual  com- 
parison since  their  magistrates  are  recompensed  by  salaries 
rather  than  by  fees. 

Aside  from  the  factors  of  number  of  arrests,  and  pay- 
ment of  police  judges,  there  remain  two  others  which  influ- 
ence municipal  incomes  from  police  departments, — the  dis- 
position of  the  cases  presented  to  the  magistrates  and  of 
the  fees  and  fines  assessed.  Owing  to  the  meagerness  of 
city  reports  and  the  lack  of  accessible  records  in  the  police 
departments  there  is  a  limited  amount  of  information  upon 
both  of  these  subjects.  It  has  been  impossible  to  obtain 
even  the  number  of  arrests  in  LaSalle  and  Springfield,  and 
in  this  latter  city  the  desk  sergeant  professed  complete 
ignorance  of  the  number  of  merchant's  police,  with  whom 
his  department  presumably  co-operates. 

The  disposal  of  persons  arrested  as  reported  in  five 
cities  may  be  sufficient  to  show  the  general  tendency  and  is 
as  follows : 

TABLE   ii. 
DISPOSAL  OF  ARRESTS  IN  FIVE  ILLINOIS  CITIES,  1009. 

Evanston.  Ottawa.  Peoria.  Quincy.  Rockford. 

Total  No.  arrests 734  425  4383  1019  1507 

Fines  paid  in  court 410  64  1218  399           338 

Cases  continued   8  9  1218  9            135 

Held    to    other    courts    or 

grand  jury   28  1 1  277  92            106 

Settled  out  of  court 22  40  3            155 

Discharged  on  payment  of 

costs   79  25 

Served  in  jail 22  66  531  173           266 

Discharged   158  273  2103  145            542 

Otherwise  disposed  of 7  2  109  173               5 

Expressed  in  relation  to  the  total  number  of  arrests 
this  table  becomes: 


411]  LICENSES  AND  POLICE  FINES  51 

TABLE  12. 
DISPOSAL  OF  ARRESTS  IN  ILLINOIS  CITIES,  BY  PERCENTAGES. 

Evanston.  Ottawa.  Peoria.  Quincy.  Rockford. 

City  Income  per  arrest $4-84  $1.40  $1.36  $4.03  $  .82 

Total  no.  of  arrests 100%        100%  100%  100%  100% 

Fines  paid  in  court 55.  15.  27.8  39.2  22.2 

Cases  continued 09  2.1  .018  .884  8.95 

Held    to    other    courts    or 

grand  jury   3.87  2.6  6.34  9.1  6.7 

Settled  out  of  court 3.8            ...  .92  .294  10.25 

Discharged  on  payment  of 

costs   10.8            ...  ...  2.45 

Served  in  jail 3.8  15.5  12.1  17.  17.2 

Discharged    21.  64.4  48.  14.2  35.8 

Otherwise  disposed  of .955          .02  2.5  17.  .035 

In  Evanston  and  Quincy  the  income  per  arrest  is  af- 
fected in  one  instance  by  the  presence  of  a  salaried  judge 
and  in  the  other  by  heavy  automobile  speeding  fines;  but 
from  the  remaining  cases  it  appears  that  there  is  no  causal 
relation  between  the  disposal  of  cases  and  income.  Ottawa, 
which  fines  only  15%  of  those  arrested  receives  a  per 
arrest  income  of  $1.40,  while  Peoria  with  almost  double 
the  percentage  of  fines  receives  a  few  cents  less. 

The  most  striking  feature  of  the  table  is  the  small  per- 
centage of  the  cases  which  yield  a  return  to  the  municipali- 
ties. On  an  average  less  than  one-third  of  the  arrests  are 
fined  in  court,  while  considerably  more  than  this  are  dis- 
charged, dismissed,  have  fines  suspended,  or  are  disposed 
of  in  a  fashion  which  would  indicate  that  the  charges  are 
not  serious  or  are  unsubstantiated.  Yet  another  third 
remains  within  the  grasp  of  the  law,  but  the  prosecution 
does  not  bring  an  income  to  the  city. 

Concerning  the  relation  of  costs  to  fines  imposed,  only 
five  cities  report  other  than  the  final  amount  turned  into 
the  city  treasury.  No  two  of  these  municipalities  report 
in  a  fashion  sufficiently  similar  that  their  reports  may 
be  tabulated. 

In  Aurora  the  total  amount  of  fines  and  costs  assessed 
was  $3,732.70  for  the  year  1909.  Of  this  sum,  $288  or  6% 


52  MUNICIPAL  REVENUES  IN  ILLINOIS  [412 

was  paid  out  as  witness  fees;  $1251  or  33%  was  accounted 
for  by  labor,  confinement,  suspension  of  fines,  etc.,  leaving 
$2273.30  or  61%  to  be  paid  to  the  city  attorney.  Reports 
of  both  clerk  and  treasurer,  however,  show  that  only 
$1976.45  was  received  by  the  city  during  the  year,  or  53% 
of  the  amount  assessed.  Against  this  the  city  appropriated 
$1124.50  to  the  police  magistrate  and  $1250  as  salary  to  the 
judge  of  the  city  court,  which  sums  are  about  $400  in 
excess  of  the  income  from  police  sources. 

The  amount  of  fines  assessed  in  Bloomington,  for  the 
year  1909  was  $7214.20,  of  which  $3538.50  or  49%  was 
fines,  $2766.70  or  38%  was  magistrates'  costs,  and  $913  or 
13%  was  police  costs.  Of  the  total  amount  asssessed, 
$2805.83  or  39%  was  not  collected  or  was  offset  by  con- 
finement; $2762.70  or  38%  went  to  the  magistrate  as  fees, 
leaving  $1645.67  or  23%  to  the  city  treasury. 

The  Eockford  report  is  for  a  period  of  six  months 
only,  and  shows  $3907.30  assessed,  of  which  $2859.50  or 
73%  was  as  fines  and  $1047.80  or  27%  was  as  costs.  This 
may  be  compared  with  49%  and  51%  for  these  respective 
items  in  Bloomington.  Of  the  total  amount  assessed  in 
Eockford,  $2713.85  or  69.5%  went  uncollected;  $410.40 
or  10.5%  was  collected  as  costs,  while  the  share  of  the  city 
was  $783.05  or  20%. 

The  total  amount  of  fines  and  costs  in  Peoria  for  the 
year  1909  was  $19,545.40,  of  which  $10,933  or  57%  was 
accounted  for  by  imprisonment,  appeals,  outstanding  or 
suspended  fines.  The  magistrate  collected  $8612.40  of 
which  he  turned  $5052.10  or  26%  of  the  total  amount  im- 
posed into  the  city  treasury.  In  Streator  $2,580.94  was 
imposed  as  fines,  of  which  $1258.46  or  48%  was  served, 
worked  out,  or  dismissed;  while  $1280.94,  or  52%  was 
collected. 

It  is  of  interest  to  note,  that  with  the  exception  of 
the  last  named  city  and  Aurora,  the  share  of  the  munici- 
palities in  the  amount  imposed  did  not  have  a  variation  of 
more  than  6%  of  the  total,  being  20%  in  Eockford,  23% 
in  Bloomington  and  26%  in  Peoria.  Yet  the  sum  which 


413]  LICENSES  AND  POLICE  FINES  53 

was  uncollected  was  extremely  variable,  33%  in  Aurora, 
39%  in  Bloomington,  48%  in  Streator,  57%  in  Peoria,  and 
70%  in  Rockford. 

Thus  to  the  causes  already  given  for  the  smallness 
of  city  returns  from  fines,  may  be  added  those  of  laxity 
in  fining  and  in  the  collection  of  fines  by  magistrates;  in 
some  cases  the  rather  large  stipends  which  go  to  the 
magistrates  in  the  form  of  fees;  and  finally  the  large 
amount  of  arrests  which  fail  to  come  within  the  jurisdic- 
tion of  the  city  courts.  While  the  police  are  for 
protection  and  not  for  revenue,  at  the  same  time  cities  are 
entitled  to  intelligent  annual  reports  from  chiefs  of  police 
and  magistrates  which  will  show  the  disposal  of  cases,  and 
the  amount  of  fines  and  costs,  assessed  and  collected. 


54 


MUNICIPAL  REVENUES  IN  ILLINOIS 


[414 


TABLE   13. 
STATISTICS  ON  STRENGTH  OF  POLICE  FORCE,  NUMBER  OF  ARRESTS,  ETC.,  1909. 


Amount  to 
Treasury 

Number  of 
Arrests 

Number  on 
Police  Force 

City  Income 
per  Arrest 

No.  of  Arrests 
per  Officer 

Population 
per  Arrest 

Population 
per  Officer 

%  of  Force  re- 
quired by  law 

Alton  

$    1657 

35° 

17 

$4-73 

20 

5° 

1030 

IOO 

Aurora  

1976 

849 

22 

2.32 

38 

34 

1355 

76 

Belleville  
Bloomington  
Champaign  
Danville  
Decatur 

56o 
1,702 
no  data 
7,041 
5  391 

438 
i35i 
no  data 
3655 
2601 

IS 
36 
8 

45 
27 

i.  05 
1.26 

1.92 
2.07 

29 

37 

81 
96 

59 
19 

7 

12 

1405 
715 
1550 
6.19 
1160 

7i 
144 
66* 
166 
87 

E  St  Louis 

i  219 

IO  OOO 

75 

.12 

133 

7 

780 

128 

Elgin 

68^ 

642 

ip 

I   06 

33 

40 

1365 

73 

Evanston  
Freeport  .... 

3,293* 
4,433 

734 
804 

29 

12 

4.48 
5.51 

25 

67 

25 

22 

860 
1465 

116* 

70 

Galesburg  
Jacksonville  
Joliet  

3,102 

1,836 

None2 

837 
43i 
1836 

12 

8 
39 

3-70 

4.26 
None 

69 

54 
47 

27 

35 
19 

1840 
1910 
895 

55* 
53* 
115 

LaSalle  .  . 

432* 

300* 

g 

1.40" 

30* 

336 

1280 

122 

Moline 

416 

p22 

19 

457 

48 

26 

1273 

79 

Ottawa  
Peoria  

495 
5,983 

425 
4383 

s 

95 

1.40 
1.36 

85 
46 

26 
15 

1907 
703 

45 
Ml 

Quincy  . 

4io63 

IOI9 

34 

4.02 

30 

35 

1073 

94 

Rockford  
Rock  Island  
Springfield  
Streator  
Urbana  

1,249 
3,364 
5,890 
941 
328 

1515 

1059 

296 
163 

36 

20 
56 

13 

4 

.82 
3-i8 

3-i8 

2.01 

42 

52 

22 
40 

29 

24 

53 
50 

1260 
1216 
920 

IIOO 

2061 

80 
77 
no 
93 
50« 

'$1832  of  this  is  auto  fines.    Average  return  from  these  $22.58. 
2So  stated  by  the  Clerk  in  answer  to  direct  question.     No  such  item 
in  report  of  clerk  or  treasurer.-    No  explanation  offered. 
3Salary  to  Judge. 
4See  Text,  p.  50. 
'Estimated  from  trial  cases. 
"Estimated. 

'Salary  limited  to  $600. 
8No  license. 


CHAPTER  III 
GIFTS,  GRANTS  AND  SUBVENTIONS. 

SCHOOL  REVENUES. 

The  most  important  item  of  revenue  within  the  group 
of  gifts,  grants  and  subventions  is  the  state  grants  to 
schools.  For  purposes  of  convenience  the  data  in  relation 
to  school  revenues  will  be  considered  together.  Table  14 
is  an  exhibit  of  the  sums  received  by  the  school  district  or 
districts  in  which  the  cities  named  are  located.  The  cities 
and  the  school  districts  are  seldom  exactly  coextensive; 
but  the  consequent  lack  of  correspondence  in  the  statistics 
is  neither  large  nor  important. 

State  Grants. 

Each  county  is  paid  its  proportionate  share  of  the 
state  school  tax,  upon  the  basis  of  inhabitants  under 
twenty-one  years  of  age.  To  this  is  added  a  share  of  the  in- 
come from  the  sale  of  public  lands  within  the  state,  plus 
a  portion  of  the  interest  on  the  surplus  of  national  revenue 
distributed  to  the  states  in  1837.  Warrants  for  the  share 
of  each  county  in  this  fund  are  issued  to  the  county  super- 
intendents of  schools  who  present  them  to  the  county  treas- 
urers for  payment.  These  warrants  are  turned  over  to  the 
state  and  apply  as  cash  on  the  county  share  of  the  state 
school  taxes.  The  county  superintendents  distribute  the 
fun^s  to  the  superintendents  of  the  school  districts. 

It  is  quite  possible  that  the  amounts  returned  to  the 
cities  are  not  as  large  as  the  sums  collected  in  state  taxes 
for  these  purposes;  but  the  exact  situation  could  only  be 
shown  by  a  detailed  comparison  of  city  and  country  wealth 
and  population. 

55 


56 


MUNICIPAL  REVENUES  IN  ILLINOIS 


[416 


TABLE  14. 
REVENUES  OF  SPECIFIED  CITY  SCHOOL  DISTRICTS.' 


c 

H 

0 

Tuition 

"s 

X 

Endowment 
Income 

V 

| 

<D 

6 

(U 

s 

1 

Amount  of 
Endowment 

Alton  
Aurora  
Belleville  
Bloomington  
Champaign 

$   3391 
4870 
2277 
4406 

923 
6942 
2872 
1592 
3135 
2403 
7319 
2885 
1796 
10,919 
6118 
3402 
7562 

1700 

$    1837 
1622 
396 
1037 

763 
497 
979 

2OIO 
1361 
223 
584 
44 
608 
3243 
973 
1739 
800 

$82,275 
113,198 
78,740 
123,319 
69,346 
255,029 
147,852 
86,318 
77,ooo 
82,000 
197,090 
135,000 
40,403 

182,908 
114,803 
275,000 

54,000 

$        200 

320 

200 

53 
1810 

506 
1307 

202 

95 
2752 

1329 
56 

$87,503 

119,690 

81,467 

130,572 
70,600 
263,241 

90,133 

85,764 
204,132 
138,670 
42,339 
400,600 
192,811 
129,106 

2  84,357 
56,500 

$    4000 

no  data 
no  data 

E.  St.  Louis  
Elgin 

Freeport  
Galesburg  

Jacksonville  
Joliet  

Moline  
Ottawa  
Peoria 

Rockford  
Rock  Island  
Springfield  
Urbana  .  , 

1No    data    for    Danville,    Decatur,    Evanston,    LaSalle,    Quincy,    and 
Streator. 

aAmount  extended. 

Endowment  Income. 

Income  from  endowments  are  found  in  only  four  of  the 
cities  considered,  and  is  an  inconsiderable  sum  in  all  but 
one  of  these.  Peoria  has  such  an  income  of  nearly  $7000. 
The  source  of  these  endowments  are  funds  distributed  by 
the  state  to  the  local  districts.  Only  in  exceptional  in- 
stances are  these  monies  preserved  intact,  the  income  to  be 
paid  annually  to  the  district  entitled  to  it. 

\Tuition. 

Tuition  is  in  its  nature  a  commercial  revenue  but  is 
mentioned  here  since  it  is  desirable  to  consider  school  reve- 


417]  GIFTS,  GRANTS  AND  SUBVENTIONS  57 

imes  as  an  entity.  The  sums  received  from  this  source 
range  from  almost  nothing  to  over  f  3000  per  year,  in  Rock- 
ford.  Several  school  districts  receive  more  than  f  1000  a 
year.  The  returns  are  naturally  influenced  by  the  presence 
or  absence  of  a  township  high  school,  altho  the  tuition  re- 
ceived from  the  grammar  schools  is  not  unimportant. 

Miscellaneous  Income. 

The  miscellaneous  fund  of  the  school  districts  needs  no 
comment  since  it  consists  of  practically  the  same  revenues 
as  does  the  similar  fund  in  municipal  budgets, — rebated 
insurance  premiums,  receipts  in  error,  etc.  In  addition, 
the  school  districts  receive  the  fines  imposed  in  the  county 
for  violations  of  other  than  city  ordinances. 

GIFTS  BY  INDIVIDUALS. 

Nearly  every  city  receives  occasional  donations  or  f 
money  or  property  of  considerable  value,  usually  for  some 
designated  purpose.  The  gifts  for  libraries  and  the  reve- 
nue from  library  endowments  are  noted  in  chapter  V. 
During  the  fiscal  year  1909  several  municipalities  received 
gifts  for  other  purposes,  or  the  revenues  from  gifts  of  an 
earlier  date.  To  Evanston  was  donated  property  for  park 
purposes  valued  at  $20,000,  and  a  play  ground  valued  at 
$12,000.  Prior  to  this  the  city  had  received  a  park  and 
museum  valued  at  $40,000.  Jacksonville  was  given  $100 
as  a  special  memorial  fund;  while  Aurora  received  the 
income  on  $6500,  to  be  used  towards  the  establishment  of 
an  orphanage. 


CHAPTER  IV 
REVENUES  FOR  SERVICES  RENDERED. 

DEPARTMENTAL  RECEIPTS. 

Table  15  is  an  exhibit  of  the  collections  of  the  several 
cities  in  1909  from  miscellaneous  sources.  The  first  col- 
umns state  the  receipts  from  fees  and  inspections,  tho 
the  returns  lack  absolute  accuracy  owing  to  frequent  con- 

TABLE   15. 

RECEIPTS  FROM  FEES,  INSPECTIONS,  DEPARTMENT  RECEIPTS,  CHARGES  AND 
OTHER  MISCELLANEOUS  SOURCES,  1909. 


I 

Inspections 

"rt 

£ 

1 

Sale  of  Public 
Property 

Miscellaneous 

Alton    

none 
none 
1037 

1022 

117 

363 

166 
2087 
So 
23/0 
none 
none 
45 
1  86 
none 
none 
none 
2725 
none 
none 
340 
none 
I5441 
none 

none 
none 
none 
1390 
104 
none 
1797 
1406 
128 
1205 
none 
no 
none 
1075 
none 
788 
343 
1285 
none 
1510 
1074 
none 
478 
none 

none 
none 
1037 
2412 

221 
363 
1963 

3493 
178 

none 
no 
45 
1261 
none 
788 

4010 
none 

1414 
none 

2022 

none 

none 
4329 
413 
2256 
none 
none 
853 
266 
90 
7583 
1223 
13 

254 
none 
none 
3135 
108 
389 
none 
npne 
388 
none 

none 
none 
none 
476 
none 
none 
238 
none 
441 
inclu'd 
38i7 
400 
none 
1307 
28 
none 
none 
1/4 
1371 
207 
none 
114 
72 
none 

232 
398 
none 
3169 
none 
46 
none 
none 
87 
2377 
383 
602 
2115 
none 
none 
none 
1324 
650 
62 
i  S,i722 
571 
774 
no  data 
none 

Belleville 

Bloomington  

Champaign  

Danville 

Decatur    

E.  St.  Louis   
Elgin    

Evanston 

Freeport 

Galesburg  

Jacksonville   
Joliet 

La  Salle  
Moline    
Ottawa   .... 

Peoria 

Quincy    

Rockford  

Rock  Island 

Streator 

Springfield    
Urbana  

Martially  included  in  licenses. 
2Services  other  than  for  water  rendered  by  water  work  dept. 

58 


419]  REVENUES    FROM    SERVICES    RENDERED  59 

fusion  with  departmental  receipts,  or  inclusion  in  the  mis- 
cellaneous fund.  The  table  will,  however,  indicate  the  rela- 
tively large  amounts  which  may  be  secured  by  a  systematic 
collection  of  fees, — impositions  which  incur  small  com- 
plaint, yet  materially  assist  in  the  adequate  enforcement 
of  building  ordinances,  water  charges,  etc. 

Bloomington,  East  St.  Louis,  Evanston,  Peoria  and 
Springfield  derive  an  income  from  fees  which  very  nearly 
equals  in  amount  that  secured  from  general  licenses.  On 
the  other  hand  seven  cities  fail  to  avail  themselves  of  this 
means  of  income.1 

Of  the  cities  using  fees  extensively,  Evanston  may  be 
cited  as  presenting  the  most  effective  system.2 

1Some  revenue  from  this  source  may  be  included  in  "miscellaneous 
returns"  but  if  so  it  is  of  small  amount. 

2Sewer  permits  $5.00 

Reconstruction  and  alterations 50 

Sidewalk  permits  

Water   permits    

One-half  inch  taps 5.00 

Five-eighths  inch  tap .6.00 

Three-fourths  inch  tap 8.00 

One  inch  taps 10.00 

Alterations  $1.00  to      4.00 

Street  permits   

Electrical    construction    permits 

New  wiring  • 

Electric  signs  

Line  construction  

Building  permits    

Brick  residences   

Frame  residences  

Alterations    

Commercial  buildings  

Depots    

$heds  and  barns 

Miscellaneous    

House  movers  permits 

One  and  one-half  story  frame 10.00 

Two  story  frame 20.00 

Moving  in  same  block 2.00 

Electrical  inspections    


MUNICIPAL  REVENUES  IN  ILLINOIS 


[420 


There  is  a  tendency  to  make  the  stipend  of  certain 
offices  the  amount  of  fees  collected.  In  such  cases,  the 
total  amounts  collected  are  seldom  included  in  the  financial 
statements  of  the  cities;  and  these  are  to  that  extent  in- 
complete. 

Usually  in  compliance  with  an  ordinance,  the  holders 
of  fee  offices  render  an  annual  report  to  the  city  clerk,  stat- 
ing the  amount  of  the  collections,  and  surplus  over  the 
amount  retained  as  remuneration.  Rarely,  however,  do 
these  reports  comply  with  the  constitutional  requirement 
that  they  be  made  semi-annually,  and  state  the  amounts 
received.3  Table  16  is  a  partial  list  of  the  fee  offices  in 
some  of  the  larger  cities,  indicating  the  extent  to  which 
fees  are  employed  in  the  payment  of  officers,  and  the  man- 
ner in  which  reports  are  made. 

TABLE   16. 


FEE  OFFICES  AND  METHOD  OF  REPORTING. 


City. 
Aurora. 


Bloomington, 


Ottawa . . 
Peoria... 


Office 
.Boiler  Inspector 

Plumbing  Inspector 

Oil  Inspector 
.  .Oil  Inspector 

Weigher 

Poundmaster 
. .  Plumbing  Board 
..City  Collector 

Oil  Inspector 

Boiler  Inspector 


Income.         Payments.         Salary. 
No   report   for   these  officers   in   the 
annual    report.      Statement    of    in- 
spections but  not  of  cash  received. 


No    report    for   these   officers   in   the 
annual  report  of  the  city. 
No  report  of  cash  taken  in. 
No  report  published. 
No  report  published. 

$1039  $103  $935 

Weights  and  Measures 

Inspector  No  report  published. 

Exam.  Electrician          $  501  $410  $  90 

Exam.  Elevator 
Operators  $  117  $  51  $  66 

Quincy Weights  and  Measures 

Inspector  No  report. 

Joliet City  Collector  }  Extensive  report  published  but  no  re- 

Oil  Inspector  jport  of  income. 

Rockford Plumbing  Board         $481  $39  $449 

'Const,  of  1870.    Art.  10,  par.  13. 


421]  REVENUES    FROM    SERVICES    RENDERED  61 

Income  from  departmental  charges  and  the  sale  of 
public  property  is  offset  by  the  cost  of  the  services  rendered 
or  by  the  value  of  the  property  disposed  of,  and  does  not 
directly  increase  the  spending  power  of  the  city.  Among 
the  most  important  charges  made  are  those  for  openings 
in  pavements,  sale  of  crushed  stone,  meters,  etc.,  altering 
water  and  sewer  pipes,  caring  for  prisoners  of  other  dis- 
tricts; and  the  sale  of  junk  and  obsolete  machinery. 

Miscellaneous  receipts  include  in  some  instances  fees, 
charges,  and  income  from  the  sale  of  property,  or  portions 
of  these  funds.  The  major  proportion  of  the  receipts, 
however,  consists  of  the  odds  and  ends  of  city  revenues, 
refunded  insurance  premiums,  over-charges  returned,  cor- 
rected errors  in  the  pay  rolls,  etc.  None  of  these  funds  are 
open  to  increase  except  that  which  might  arise  from  a  more 
thoro  reckoning  of  accounts  receivable. 

SERVICE  PRIVILEGES. 

Fourteen  of  the  twenty-four  cities  here  discussed  re- 
ceive remuneration  in  some  measure  for  public  service 
franchises  granted.  No  municipality  taxes  all  of  the  fran- 
chises in  force  within  it;  and  in  all,  only  twenty-six  fran- 
chises out  of  over  one  hundred  and  fifty,  or  about  seventeen 
percent,  yield  payments  to  the  grantors.  Of  this  number, 
five  are  street  railway  privileges  on  which  the  tax  is  only 
from  $5.00  to  $25.00  per  car  in  continuous  operation, 
amounting  with  one  exception  to  only  a  few  hundred  dol- 
lars per  year.  East  St.  Louis,  however,  receives  $1600 
from  this  source. 

Nine  of  the  franchise  payments  are  based  upon  a  per- 
centage of  income,  the  lowest  being  one  percent  of  the  net 
city  telephone  receipts  in  Quincy,  and  the  highest,  five  per- 
cent of  the  gross  interurban  receipts  in  Belleville.  The 
predominant  figure,  which  prevails  in  seven  cases,  is  two 
percent  of  the  gross  receipts.  In  two  of  these  instances  it 
will  become  four  percent  after  ten  years  of  operation.  Sim- 
ilarily,  two  of  the  telephone  franchises  pay  on  a  revenue 


62  MUNICIPAL  REVENUES  IN  ILLINOIS  [422 

basis,  that  is,  one  dollar  per  telephone,  which  amounts 
roughly  to  five  per  cent  of  the  gross  income. 

Some  of  the  utility  companies  pay  a  fixed  sum  ranging 
from  f  500  to  f  2000  per  year.  Such  payments  do  not  allow 
for  the  growth  in  value  of  the  franchise  and  probably  are 
not  as  large  as  would  be  realized  by  a  percentage  tax. 
For  example,  Bloomington  (26,000  pop.)  receives  by  a  two 
percent  tax  upon  the  gross  receipts  of  the  street  railway, 
|3400;  Joliet  (35,000  pop.)  receives  a  cash  payment  of  only 
$1000.  Peoria  (67,000  pop.),  the  largest  city  of  the  group, 
receives  a  fixed  amount  of  $500  a  year  from  the  telephone 
company,  a  sum  which  is  exceeded  in  all  other  cases  except 
in  one  city, — Alton. 

Three  municipalities,  Aurora,  Joliet,  and  Rockford, 
have  recognized  the  importance  of  franchises  as  a  source  of 
revenue  by  each  assessing  three  or  more  utilities,  with  a 
resulting  income  of  over  $3000  to  each  city.  Springfield 
receives  a  similar  sum  as  two  percent  of  the  street  railway 
receipts.  The  remaining  cities  have  provided  for  fran- 
chise payments  in  a  desultory  fashion.  Having  no 
knowledge  of  what  constitutes  a  reasonable  rate  and  guided 
by  a  desire  to  increase  property  values  and  build  up  the 
city,  the  greater  part  of  the  franchises  have  been  given 
away  for  long  terms  and  almost  without  payment. 

A  marked  exception  to  the  above  statement  is  Aurora, 
which  in  addition  to  the  annual  charges  noted  in  table  17 
made  the  following  initial  charges  for  franchises  granted : 
street  railway  $30,000  plus  $3641  as  damages  and  attor- 
ney's fees;  gas  and  electric,  $25,000  to  a  fund  for  the  erec- 
tion of  a  new  bridge ;  and  interurban,  $25,000.  That  pub- 
lic service  corporations  can  afford  to  pay  as  large  sums 
as  these  in  addition  to  a  proportion  of  their  annual  receipts, 
for  the  privilege  of  operation,  is  evidence  of  the  reason- 
ableness of  any  franchise  payments  noted  in  the  following 
table: 

Under  an  effective  system  of  legislative  regulation,  by 
which  the  price  of  a  public  utility  commodity  would  be 
such  as  to  pay  only  the  cost  of  production  and  a  reasonable 


423] 


REVENUES    FROM    SERVICES    RENDERED 


63 


TABLE  17. 
RATES,  AND  INCOME  FROM  FRANCHISES,  1909. 


Utility 

Basis  of  Payment 

Income 

u 

"«3   § 

31 

Alton  

Telephone 

i%  net  city  receipts 

$  221 

$  221 

Aurora   

Gas  

$1000  per  year   

IOOO 

St.  Railway  .  . 

$1000  per  year   

IOOO 

Telephone 

$i  per  phone  

1537 

Interurban   . 

$500  per  year 

500 

4077 

Belleville    

St.  Railway  .  . 
Interurban   .  .  . 

$5  per  car  
5%  gross  receipts  .... 

55 
1103 

IIS8 

Bloomington  .  . 

St.  Railway  .. 

2%    gross    receipts    for    10 
years,  minimum  amount  to 
be  next  ten  years  at  4%  .  . 

3400 

3400 

Decatur  

St  Railway  .  . 

$10  per  car  

150 

150 

E   St   Louis 

St  Railway 

$25  per  car 

1600 

l6oO 

Elgin 

Telephone 

$i  per  phone  

612 

St   Railway 

$10  per  car 

no 
data 

Joliet 

Telephone 

$i  per  phone  

1317 

Gas 

$1000  per  »year 

IOOO 

St   Railway 

$1000  per  year 

IOOO 

3317 

Ottawa 

St   Railway 

$2000  per  year       

2000 

2OOO 

Peoria 

Telephone    .  . 

$500  per  year    

500 

50O 

Interurban   .  .  . 

Five  cents  per  car  entering 
terminal1             

Quincy    

Telephone    .  . 

2%  gross  receipts  

963 

St    Railway  .  . 

$20  per  car  

320 

1283 

% 

Rockford 

2%   gross   receipts1 

(900) 

760 

Interurban   .  . 

$2000  per  year   

2OOO 

Heat 

2%  gross  receipts     

560 

3320 

JNot  enforced  in  1909. 


64 


MUNICIPAL  REVENUES  IN  ILLINOIS 


[424 


TABLE  17.— Continued. 
RATES,  AND  INCOME  FROM  FRANCHISES. 


V 

t) 

Utility 

Basis  of  Payment 

3 

l] 

M 

H  J3 

Streator     .   .   . 

Electric       .... 

2%   gross    

372 

372 

Springfield 

St    Railway 

$10  per  car  

3OO 

2%    gross    receipts    for    ten 

years;  4%    for  second  ten 

years;     for     sewers     and 

bonded   indebtedness    .... 

3319 

3619 

return  upon  the  actual  capital  invested,  any  payment  for 
the  privilege  of  operation  would  only  increase  prices  to  the 
consumer.  Under  the  present  system  in  Illinois,  except  for 
a  very  limited  and  unscientific  control  by  city  councils,  the 
price  of  a  utility  commodity  is  "all  that  traffic  will  bear" : 
that  is,  where  the  units  consumed  multiplied  by  the 
margin  of  profit  will  give  the  greatest  return;  and  if  the 
price  is  lowered  it  is  because  an  increased  consumption  will 
more  than  offset  the  lower  price.  Under  such  methods  of 
price  fixing,  any  payment  required  for  the  franchise  will 
be  upon  the  profits  of  the  company  and  cannot  cause  an 
increase  in  cost  to  the  consumer. 

In  addition  to  the  payments  mentioned,  some  public 
service  corporations  are  required  to  furnish  limited  free 
service  to  the  cities  in  which  they  operate.  Electric  light 
companies  usually  give  free  light  to  the  city  hall,  and  oc- 
casionally to  the  fire  stations.  Telephone  companies  fur- 
nish from  six  to  eighteen  free  instruments  and  charge  for 
any  number  over  that  stipulated  in  the  franchise.  In 
addition  to  paving  within  their  tracks  and  sprinkling  the 
right  of  way,  street  car  companies  usually  extend  free 
transportation  to  numerous  city  officials.  It  is  difficult  to 
estimate  the  value  of  such  services,  but  they  exist  in  every 
municipality,  and  are  perhaps  worth  from  $100  to  $500 
per  year,  but  have  a  much  greater  apparent  value. 


425] 


REVENUES    FROM    SERVICES    RENDERED 


Table  18  is  a  statement  of  the  dates  of  grant  and  ex- 
piration of  the  larger  proportion  of  the  franchises  in  force 
in  the  cities  under  consideration,  and  from  it  may  be 
estimated  the  possibilities  of  franchise  revenue  being  se- 
cured. Cities  renewing  franchises  are  likely  to  give  more 
attention  to  this  than  when  making  the  original  grants. 
The  inclination  to  encourage  new  enterprises  by  liberal 

TABLE  18. 
DATES  OF  GRANT  AND  EXPIRATION  OF  FRANCHISES. 


Gas 

Water 

Electric 

St.  Railway 

£ 

<u 

8 

1 
O 

CO 

I 

c 
ctf 

E 

o 

0, 

1 

c 

rt 
O 

•a 

I 

n 
5 
o 

a, 
y, 
W 

Alton  
Aurora 

1908 

1868 
1889 
1868 
1870 
1896 
1868 
1868 

1898 

1910 

1868 
1908 

1902 

1909 
1910 

1907 

1868 
1890 

1910 

1868 

1913 
1958 

Perp. 
Perp. 
Perp. 
Perp. 
I99S 
Perp. 
1909 

1928 
I9301 
Perp. 
1958 
1932 
1929 
i9602 
1947 

Perp. 
1910 

1960 
Perp. 

1907      1957 
Municipal 
1907  |   1932 
Municipal 
1909      1939 
1907      1932 
Municipal 
1885  |   1915 
Municipal 
Municipal 
1882  I   1912 
Municipal 
Municipal 
Municipal 
Municipal 
Municipal 
Municipal 
1889  1  1919 
1904  1  1934 
Municipal 
Municipal 
Municipal 
1886      1916 
1915 

1908 
1889 
1909 
w 
1884 
1893 

1895 

1907 
1890 

1897 

1902 
1910 
1910 
1906 

1882 
1882 

1889 
1908 

1913 
1958 
Perp. 
1929 
thout 

1913 
1920 

1937 
1910 

1947 
1932 
1930 
1930 
1926 

Perp(?) 
Perp(?) 

1924 
1928 

1909 
1893 
1909 

1898 
1901 
1894 
1893 

1907 
1890 
1868 
1898 
1904 
1910 
1910 
1906 

1898 
1899 
1907 
1889 

1929 
1919 
1929 

1928 
1921 
1914 
1913 

1937 
1910 
Perp. 
1948 
1954 
1930 
1930 
1926 

1923 

1924 
1927 
1924 

Belleville  
Bloomington  .  . 
Champaign  .  .  . 
Danville  
Decatur 

E.  St.  Louis.... 
Elgin  

Evanston  
Freeport  
Galesburg  
Jacksonville  .  .  . 
Joliet  
La  Salle  
Moline  
Ottawa 

Peoria  
Quincy  
Rockford  
Rock  Island  .  .  . 
Springflfeld  
Streator  
Urbana  

JPrice  regulated  every  5  years. 
"Price  regulated  every  ten  years. 
'Cancelled  franchises  for  25  years  (1902). 


66 


MUNICIPAL  REVENUES  IN  ILLINOIS 


[426 


TABLE  18.— Continued. 
DATES  OF  GRANT  AND  EXPIRATION  OF  FRANCHISES. 


Interurban 

Bell 
Telephone 

Ind. 
Telephone 

Heat 

I 

O 

8 

•a 
I 

E 

O 

1 

I 

rt 

0 

u 

'Si 

X 

W 

"c 
'    n 

<3 

8 

1 

Alton  

1909 
1893 
1905 

1902 

Wit 
Wit 

1929 
1918 

1955 

1922 

lOUt 

hout 

Wi 

1882 

1892 

thout 
Perp. 
Perp. 
1912 

1899 
1899 
1896 

1902 

1893 

1901 

1905 

1899 

1919 
1924 
1921 

1932 
1913 

1921 
1924 

Aurora  
Belleville 

Bloomington  .  . 
Champaign  

1900 

Wit 
1895 
1903 

1920 

lOUt 

1945 
1933 

Decatur  
E.  St.  Louis  
Elgin  

1892 

1897 
1894 

1910 

1882 

1897 

1901 

Wi 

1893 
1898 

1891 
1910 

1912 
1917 
1924 

1930 
Perp. 

1947 
1921 
:hout 
Perp(?) 
1918 

Perp. 
1933 

1900 

1925 

Evanston  

Galesburg  
Jacksonville  .  .  . 
Joliet  
La  Salle 

1903 

Perp. 

1906 
1904 
1910 
1906 

I9S6 
1954 
1930 
1926 

1902 

1932 

Moline  
Ottawa 

Without 

Peoria  
Quincy  
Rockford  
Rock  Island  .. 
Springfield  
Streator  
Urbana  . 

1902 
1904 

1001 

1908 
1900 

1  003 

1922 
1929 
1921 
1933 

1921 
1033 

1907 
1902 

1947 
1927 

, 
1907 

1957 

1910 
1008 

1935 
1028 

Pero. 

terms  is  instanced  by  the  large  number  of  interurban  fran- 
chises which  have  been  issued  in  the  last  few  years, — the 
majority  of  which  extend  for  fifty  years  and  are  not  sub- 
ject to  any  special  franchise  payment. 

Of  178  public  utilities  operating  in  24  cities,  data  was 
secured  on  the  length  of  franchise  in  111  cases.  In  addi- 
tion, 14  plants  were  municipal ;  seven  were  operating  with- 
out a  franchise,  either  normally,  or  pending  settlement  with 
the  city ;  and  in  five  cases  only,  the  date  of  expiration  was 


427]  REVENUES    FROM    SERVICES    RENDERED  67 

not  ascertained.  Of  the  111  franchises,  19  are  perpetual, 
one  is  for  ninety-nine  years;  15  are  for  fifty  years;  three, 
for  forty  years ;  two  are  for  thirty-five  years ;  16  for  thirty 
years ;  19,  for  twenty-five  years ;  one  for  twenty-three  years ; 
and  35  are  for  twenty  years. 

The  statement  that  nineteen  of  a  possible  111  fran- 
chises are  perpetual  must  not  go  unqualified.  In  several 
instances  the  franchises  do  not  state  the  date  of  termina- 
tion and  will  probably  sooner  or  later  be  brought  into  the 
courts  for  interpretation.  In  at  least  one  instance  a  gas 
franchise  granted  in  perpetuity  by  the  state  legislature, 
has  been  challenged  by  the  city  in  which  the  plant  is  oper- 
ating. The  legal  department  of  the  municipality  maintains 
that  the  state  grant  applied  only  to  gas  for  lighting  pur- 
poses, and  that  its  transmission  for  heating  is  without 
legal  authority.  In  consequence  an  ordinance  was  passed 
regulating  the  sale  of  all  gas,  giving  the  company  the  choice 
of  acceptance  or  of  ceasing  to  sell  for  the  purpose  of  heat- 
ing and  for  power.  The  decision  of  the  case  will  have  an 
important  bearing  upon  the  remaining  legislative  fran- 
chises. 

It  is  in  relation  to  gas  franchises  that  the  interests  of 
the  municipalities  have  suffered  most.  Of  24  cases,  eight 
franchises  are  perpetual ;  one  is  for  99  years,  four  for  fifty 
years,  and  two  others  are  for  forty  years.  Five  franchises 
are  for  a  reasonable  term,  and  in  four  instances  data  is 
missing.  The  telephone  industry  is  a  close  second  in  this 
way,  for  out  of  fifteen  "trust"  franchises,  five  are  perpetual. 

Also,  in  certain  cities  there  is  an  inclination  to  grant 
franchises  for  long  terms.  In  Joliet,  five  out  of  six  utilities 
may  operate  for  fifty  years,  for  which  permission  is  paid 
|2000  annually,  plus  a  percentage  of  receipts,  which  last 
year  amounted  to  $1317.  Aurora  has  two  fifty  year  fran- 
chises granted  as  recently  as  1908.  Several  cities  have 
fifty  year  franchises  granted  since  1904,  one  of  them  (in 
Ottawa)  cancelling  a  franchise  for  a  shorter  term  to  give 
the  longer  one. 


68  MUNICIPAL  REVENUES  IN  ILLINOIS  [428 

The  cities  which  have  not  qualified  their  franchises 
with  provisions  for  payments  will  have  an  opportunity  to 
do  so  within  the  reasonably  near  future.  Out  of  96  fran- 
chises to  expire,  24  will  end  before  1921;  during  the  next 
decade  38  of  the  remainder  will  terminate;  from  1930  to 
1940,  15  will  be  terminated;  from  1940  to  1950,  six.  The 
13  remaining  franchises  in  operation,  extend  beyond  the 
middle  of  the  century.  This  number,  considered  with  the 
nineteen  perpetual  franchises,  places  fifteen  percent  be- 
yond the  reasonable  control  of  the  municipalities. 

Items  of  revenue  from  minor  public  privileges, — bay- 
windows,  sub-sidewalks,  etc.,  are  absent  from  the  budgets 
of  the  smaller  cities.  The  revenue  from  the  use  of  city 
streets  and  alleys  has  been  spoken  of  in  the  consideration 
of  the  income  from  the  use  of  public  property. 

SPECIAL  ASSESSMENTS. 

Special  assessments  are  not  in  the  usual  sense  city 
revenues  since  they  are  raised  for  a  specific  purpose  and  are 
kept  separate  from  the  general  fund  in  the  city  treasury. 
They  do,  however,  form  an  important  part  of  the  aggre- 
gate financial  transactions  of  the  municipalities ;  and  their 
extent  and  significance  should  be  noted. 

A  thoro  consideration  of  special  assessments  would 
require  an  extensive  study  both  of  amounts  expended  and 
purchases,  as  well  as  the  amounts  delinquent,  methods  of 
assessment,  interest,  cost  of  collection,  etc.,  matters  which 
can  only  be  mentioned  here. 

Pursuant  to  the  constitution4  the  assembly  has  passed 
a  series  of  acts  permitting  improvements  by  special  assess- 
ment or  special  taxation  to  comprehend  the  following  sub- 
jects: bridges,  viaducts,  water  reservoirs  and  works, 
hydrants,  water  mains,  drains,  pumping  stations,  parks, 
boulevards,  streets,  alleys,  and  other  public  places.  All 
or  part  of  the  cost  is  assessed  upon  the  property  benefitted 
in  proportion  to  the  benefit  received,  the  residue  of  the  cost 

4Const.  of  1870.    Art.  9,  par.  9. 


429]  REVENUES    FROM    SERVICES    RENDERED  69 

being  raised  by  uniform  taxation.5  The  further  restric- 
tions are  that  the  purpose  be  public;  that  the  apportion- 
ment be  in  accordance  with  some  general  rule;  and  that 
no  assessment  be  levied  for  repairs,  since  they  contain  no 
element  of  permanency, — with  the  exception  that  repair 
assessments  are  permitted  on  drains,  ditches,  and  levees.6 

The  determination  of  the  basis  for  apportioning  the 
cost  of  such  improvements  is  left  to  the  city,  and  the  courts 
are  reluctant  to  inquire  into  the  equity  of  the  decision. 
The  more  usual  schemes  of  assessment  are  based  upon 
superficial  area,  actual  value  of  the  property,  and  frontage, 
the  preference  being  with  the  latter  method.  In  street  pav- 
ing if  the  corner  lots  face  the  paved  street  the  narrow 
way,  no  assessments  is  made  upon  the  lots  fronting  upon 
the  side  streets;  otherwise  the  first  three  lots  on  the  side 
street  usually  are  assessed  sixty  percent,  forty  percent, 
and  twenty  percent  of  what  would  be  the  normal  cost  of 
paving  in  front  of  them.  These  percentages  vary  slightly 
in  different  localities. 

The  proportion  of  the  cost  borne  by  the  municipality 
differs  widely  in  the  construction  of  sewers  and  other 
works,  the  determination  of  the  public  benefit  being  left  to 
the  boards  of  local  improvement.  In  the  building  of  streets 
it  is  customary  for  the  city  to  assume  the  cost  of  the  inter- 
sections. The  percentages  of  the  total  cost  borne  in  sev- 
eral cities  ranges  from  11.3%  to  20%,  depending  upon 
the  nature  of  the  improvements.  The  intersection  rule  re- 
garding streets  places  about  14.3%  of  the  cost  upon  the  city 
corporation. 

In  the  process  of  local  assessment  the  most  prominent 
part  is  played  by  the  board  of  local  improvement, — a  board 
whose  technical  officers  are  always  the  superintendent  of 
streets  and  the  city  engineer.  The  ordinances  to  improve 
by  special  assessment  or  taxation  originate  in  this  body, 
either  by  petition  or  upon  their  own  initiative.  Public 

'Chicago  v.  Lamed,  34  III.  20$,  282. 

'Crane  v.  West  Chicago  Park  Commissioners,  153  III.  348. 


70  MUNICIPAL  REVENUES  IN  ILLINOIS  [430 

hearings  are  held  upon  any  contemplated  action,  except 
the  laying  of  house  drains,  sewer  service  pipes  and  side- 
walks, which  hearings  consider  the  necessity,  character, 
and  cost  of  the  improvement.  Except  in  cities  of  over 
100,000  population  remonstrance  petitions  may  be  filed 
within  thirty  days  suspending  action  for  one  year.  The 
ordinance  of  improvement  with  estimated  cost  is  then 
passed.  Apportionment  of  the  cost  is  made  and  the  as- 
sessment roll  drawn  up,  the  latter  being  open  to  court  re- 
views and  revision.  Supplementary  assessments  may  be 
levied  if  the  original  sum  is  insufficient,  provided  that  if 
the  increase  is  more  than  ten  percent  the  entire  process  of 
assessment  must  be  repeated. 

The  collection  of  assessments  is  in  the  hands  of  the 
city  collector  until  March  10th.  He  has  no  power  to  en- 
force payment;  and  the  collection  of  delinquent  sums  is 
assumed  by  the  county  treasurer.  After  preliminary  no- 
tices, these  delinquencies  are  collected  in  substantially  the 
same  manner  as  delinquent  property  taxes,  already  de- 
scribed. 

Contrary  to  what  might  be  anticipated  with  taxes  of 
this  nature,  the  amount  returned  to  County  Collector  for 
collection  is  considerably  less  proportionately  than  is  the 
case  with  property  taxes.  For  example  in  LaSalle  only 
12.4%  of  the  total  was  returned  to  the  county  collector; 
in  Peoria,  19.6%;  Bloomington,  28.8%;  and  in  Evanston, 
42.5%. 

The  difficulties  met  in  correlating  the  assessment  to 
the  actual  cost  of  the  improvement  is  apparent,  and  in  con- 
sequence in  practically  every  instance  rebates  are  paid  or 
new  assessments  are  levied.  The  matter  of  rebating  is  of 
easy  solution  since  the  actual  cost  of  the  construction  is 
known  before  even  a  few  installments  are  paid,  and  any 
rebate  may  be  prorated  on  future  installments.7  This 
naturally  involves  increased  clerical  cost.  Deficits  in  the 

TIn  Evanston  the  rebates  on  thirteen  assessment  funds  were  3.5% ; 
2.8%;  6%;  n%;  11.5%;  10% ;  25%;  30%;  14%;  14%;  24%  and 
20%.  The  largest  percentages  were  upon  sewer  constructions. 


431]  REVENUES    FROM    SERVICES    RENDERED  71 

fund  are  more  serious  and  may  be  either  the  result  of 
underestimates  or  of  uncollected  payments.  In  Freeport 
the  liabilities  are  $38,552  in  excess  of  the  special  assess- 
ment assets,  or  13.3  %  of  the  total.  The  Mayor  of  Peoria 
in  an  annual  address  to  the  city  council8  remarked  that  the 
"amount  of  improvement  bonds  outstanding  is  many 
thousands  of  dollars  in  excess  of  special  assessments  re- 
maining uncollected". 

The  extensive  precautions  taken  to  protect  the  rights 
of  the  property  owner  have  been  mentioned,  and  these  safe- 
guards add  a  considerable  cost  to  the  assessment  work.  In 
Urbana,  newspaper  advertisements  costs  $75  for  each  job, 
in  addition  to  the  printed  notices  sent  to  each  person  con- 
cerned. By  statute  the  preliminary  expense  is  limited  to 
six  percent  of  the  total,  and  this  allowance  is  entirely  con- 
sumed in  the  smaller  constructions.  In  cases  involving 
larger  amounts  these  preliminary  expenses  fall  to  three  or 
four  percent.  An  example  of  the  costs  involved  in  extend- 
ing assessments  may  be  taken  from  the  collection  returns  in 
Evanston.  Of  $126,144  expended,  bonds,  coupons,  war- 
rants, and  miscellaneous  funds  took  $122,446,  or  97%.  Re- 
bates amounted  to  $1,061,  or  .08%,  while  the  expenses  in- 
cidental to  collection,  etc.,  took  $2,618,  or  2.2%. 

The  surest  criteria  of  the  extent  to  which  special  as- 
sessments are  used  would  be  the  amounts  of  improved 
streets,  sewers  and  other  public  constructions  in  each  city. 
Unfortunately  not  all  city  engineers  are  familiar  with  the 
total  amounts  of  these  works  in  their  municipalities  so  a 
complete  comparison  is  impossible.  Of  eight  cities,  how- 
ever, the  largest  proportion  of  paved  streets  was  in  Free- 
port,  being  45.3%  of  the  total;  Springfield  followed  with 
45%;  and  Rockford  with  44%.  The  smallest  percent  is 
in  Galesburg  which  has  only  21.4%  improved;  the  next 
lowest  being  Decatur  with  28.7%  improved. 

Regarding  sewer  construction,  Danville  has  one  mile 
for  every  490  inhabitants,  Bloomington  and  Freeport  fol- 

"E.  N.  Woodruff,  in  the  City  Comptroller's  Report,  /pop. 


72  MUNICIPAL  REVENUES  IN  ILLINOIS  [432 

lowing  with  500  and  515  persons  per  mile.  The  largest 
population  per  mile  is  in  East  St.  Louis,  which  city  has 
1310  persons  for  each  mile  of  sewer.  In  the  larger  cities, 
however,  there  is  a  tendency  to  have  fewer  sewers  in  pro- 
portion to  the  population,  as  the  per  mile  population  in 
Springfield  is  850,  in  Rockford  is  835,  and  in  Gales- 
burg  720. 

The  contractor  for  special  assessment  work  receives 
as  payment  bonds  payable  in  five  or  ten  annual  install- 
ments (thirty  in  the  case  of  water  works),  bearing  interest 
at  5%.  Such  bonds  are  not  a  lien  upon  the  city,  but  upon 
the  property  of  the  individual,  altho  the  municipality 
undertakes  and  guarantees  the  collection.  The  amount  of 
bonds  outstanding  in  the  cities,  would,  however,  fail  to 
indicate  the  extent  to  which  assessments  are  used  since 
the  amount  is  decreased  by  one-tenth  each  year,  and  the 
constructions  doubtless  have  a  longer  life  than  this  period. 
This  statements  is  supported  by  a  comparison  of  the  per 
capita  special  assessment  bond  indebtedness  in  a  few  cities. 
Aurora  has  such  per  capita  indebtedness  of  $5.35 ;  Decatur 
of  $3.00;  Elgin,  $6.40;  Freeport,  $14.70;  LaSalle,  $4.00; 
and  Peoria,  $6.30, — a  considerable  variation  compared 
with  the  paved  streets  to  total  streets,  which  range  from 
20%  to  4:0%. 

For  the  same  reason  the  amount  of  cash  collected  each 
year  to  retire  bonds,  or  the  amount  of  bonds  issued,  is  a 
false  indication  of  the  importance  of  assessments  in  mu- 
nicipal finance, — the  latter  sum  even  more  so  than  the 
former,  since  the  amount  of  construction  work  fluctuates 
widely  from  season  to  season. 


CHAPTER  V 
MUNICIPAL  INDUSTRIES  AND  PROPERTY. 

Judged  by  the  gross  revenue  received,  municipal  in- 
dustries rank  third  in  importance  as  sources  of  municipal 
income.  But  the  gross  income  from  such  sources  is  largely 
if  not  wholly  absorbed  by  the  expenses,  and  in  most  of  the 
cities  under  review  municipal  industries  are  conducted  at 
a  loss.  The  net  income  from  such  sources  and  its  per- 
centage of  the  total  revenue  for  general  purposes,  as  shown 
in  the  concluding  chapter,  is  of  small  importance. 

By  municipal  industries  are  meant  those  undertak- 
ings which  involve  the  distribution  of  economic  goods 
for  a  price,  thus  excluding  such  functions  as  police,  fire 
protection,  and  schools,  all  of  which  are  contemplated  if 
not  distinctly  recognized  in  the  present  state  constitution. 
There  is  no  distinct  constitutional  provision  authorizing 
municipal  industries;  and  most  undertakings  are  of  later 
origin  than  the  present  state  constitution,  resting  on  legis- 
lative grants  under  the  residual  powers  of  government. 

The  municipal  industries  conducted  by  the  cities 
studied  are  of  three  main  classes:  water  works,  electric 
light  plants  and  cemeteries.  Water  works  and  cemeteries 
may  produce  a  net  revenue.  Electric  light  plants  in  the 
cities  studied  have  no  income,  as  they  are  used  only  for 
public  lighting.  But  they  are  considered  here  because  of 
their  close  relation  with  the  operation  of  municipal  water 
works,  of  which  they  are  usually  a  part. 

Some  incidental  income  is  also  derived  from  libraries, 
hospitals,  sewers,  real  estate  and  other  property. 

WATER  PLANTS. 

Legislative  enactments  of  1873  and  18791  authorized 
the  establishment  of  municipal  sewers  and  water  works, 
tho  both  of  these  might  have  been  constructed  under  the 

'Kurd's  Revised  Statutes  (1908),  ch.  24,  pars.  254  and  323. 
73 


74  MUNICIPAL  REVENUES  IN  ILLINOIS  [434 

police  powers  of  the  cities.2  Earlier  legislation  relative  to 
waterworks  provided  for  the  lease  of  plants,  and  for  mak- 
ing contracts  for  a  supply  of  water  from  private  firms  for 
a  period  of  not  more  than  thirty  years.  In  case  of  leasing 
any  surplus  over  the  cost  of  operation  might  be  applied  to 
the  erection  and  extension  of  a  municipal  plant.  An 
act  of  19053  provides  that  plants  may  be  bought  or  erected 
upon  a  favorable  three-fourths  vote  of  the  citizens,  a 
direct  tax  of  not  more  than  one  percent  defraying  the  cost. 
Bonds  may  be  issued  against  these  taxes  bearing  interest  at 
six  percent.  The  water  rates  must  be  sufficient  to  provide 
for  payment  of  the  bonds,  interest,  maintenance  and  opera- 
tion of  the  works,  extensions  and  repairs.  Thus  Illinois  has 
gone  far  in  the  protection  of  the  taxpayer  from  impositions 
in  the  interest  of  the  water  consumer.  There  are  no  good 
reasons  for,  and  many  against  paying  for  extensions  from 
the  water  rates.  These  should  be  charged  to  capital  ac- 
count, and  made  neither  a  burden  upon  the  tax  payer,  nor 
upon  the  present  consumer. 

Should  the  preceding  provisions  prove  inadequate  to 
public  need,  there  are  other  provisions  which  authorize  a 
one  mill  tax  for  the  extension  of  mains,  maintenance  of 
plant,  or  for  refunding  debt.4  By  a  two-thirds  vote,  this 
tax  may  be  advanced  to  three  mills.  Cities  when  buying 
plants  may  also  pledge  the  revenues  as  security  for  the 
bonds  issued,  and  may  execute  a  mortgage  or  trust  deed  for 
the  property.5  In  case  of  reversion  to  the  original  owner, 
any  franchise  rights  pre-existing  become  operative. 

Of  the  twenty-four  cities  which  were  investigated, 
fourteen  have  availed  themselves  of  the  privilege  of  estab- 
lishing water  plants;  and  data  concerning  the  operation 
has  been  secured  from  thirteen  of  these. 

In  table  22  is  shown  the  amount  of  money  derived  an- 
nually from  water  rents  in  the  several  cities;  but  such 

2Goodnow,  "City  Government  in  the  United  States",  p.  165. 
*Rev.  Stat.  ch.  24,  par.  27oh-q. 
'Ibid.  ch.  24,  par.  281. 
slbid.  ch.  24,  par.  27od. 


435]  MUNICIPAL    INDUSTRIES    AND    PROPERTY  75 

revenue  should  be  offset  by  the  operating  expenses,  interest 
on  the  value  of  the  plant  and  depreciation  allowances. 
When  this  has  been  done  the  revenue  usually  becomes  a 
deficit,  which  sooner  or  later,  must  be  made  up  from  the 
general  fund  of  the  city,  by  the  issue  of  bonds  or  by  taxes. 
This  deficit  may  be  considered  the  amount  which  the 
municipality  contributes  in  payment  for  the  water  pumped 
for  public  buildings,  and  as  rental  for  fire  hydrants.  Such 
accounting  contemplates  the  city  water  plant  operated  as 
a  separate  and  distinct  institution,  earning  its  own  way  in- 
dependently of  the  city  treasury,  charging  the  water  con- 
sumer for  his  benefits,  and  the  tax  payer  for  the  benefits 
rendered  to  the  city  at  large. 

It  is  sometimes  assumed  that  the  water  consumer  and 
the  taxpayer  are  identical,  and  that  the  separation  of  the 
two  for  a  study  of  water  revenues  is  unnecessary.  Such 
is  not  the  case,  nor  can  a  practice  followed  uniformly  by 
public  utility  commissions  be  renounced  by  such  argument. 
There  is  ample  evidence  that  not  all  urban  inhabitants  are 
direct  water  consumers.  Not  only  are  there  sparsely  set- 
tled sections  which  are  not  reached  by  the  water  mains, 
but  limited  sections  of  the  more  densely  parts  are  not 
served.  If  we  may  estimate  that  five  persons  (  the  ordinary 
family)  are  served  by  each  water  service,  then  in  Rockford, 
35,000  out  of  a  population  of  42,000  are  water  consumers; 
in  Bloomington,  10,000  of  26,000,  etc.  Roughly,  twenty 
percent  of  the  people  receive  benefit  from  water  works, 
who  do  not  contribute  to  their  support  by  domestic  con- 
sumption. But  should  it  appear  that  the  tax  payer  and 
the  water  consumer  become  largely  the  same  persons,  this 
fact  does  not  justify  an  unbusiness  like  management  of 
waterworks. 

The  Wisconsin  Railroad  Commission  has  a  system  for 
the  separation  of  the  cost  of  the  public  from  the  domestic 
service  which  is  preferable  to  one  based  on  the  above  men- 
tioned distinction.6  Each  water  plant  has  an  investment 

'Wisconsin  Railroad  Commission.     Pub.  U. — 52.   {City  of  Ashland  v. 
Ashland  Water  Company.)  295. 


76  MUNICIPAL  REVENUES  IN  ILLINOIS  [436 

above  that  required  for  domestic  purposes,  which  is  occas- 
ioned by  the  necessity  of  fire  protection  and  other  public 
needs.  The  commission  therefore  divides  the  investment 
for  these  two  purposes,  and  upon  this  basis  estimates  the 
cost  of  depreciation,  interest  and  maintenance  chargeable 
to  each.  While  this  is  of  course  the  correct  method  its 
use  is  only  possible  by  means  of  a  detailed  engineering  valu- 
ation. However,  it  is  not  here  the  purpose  to  determine 
the  equitable  charges  for  the  taxpayers  and  water  con- 
sumers of  Illinois  cities,  but  rather  to  compare  the  different 
costs  of  operation,  and  to  point  out  in  certain  cases  mat- 
ters which  are  worthy  of  explanation  or  investigation  by 
the  individual  superintendents. 

It  may  be  necessary  to  defend  the  view  that  a  munici- 
pal water  plant  should  earn  a  reasonable  rate  of  interest 
upon  the  amount  invested.  If,  however,  we  are  willing  to 
divorce  the  personality  of  the  water  consumer  from  the 
taxpayer,  the  justice  of  such  a  demand  is  apparent.  While 
the  value  of  the  plant  is  represented  by  bonds,  the  necessity 
of  the  plant  earning  interest  upon  these  bonds  will  hardly 
be  questioned.  When  such  bonds  have  been  refunded,  or 
have  been  retired  through  the  exercise  of  the  taxing  power, 
it  would  seem  that  a  sum  equal  to  the  original  interest 
should  still  be  turned  into  the  city  treasury, — in  one  case 
to  pay  the  interest  on  the  new  bonds ;  in  the  other  to  recom- 
pense the  tax  payers  for  the  use  of  the  funds.  It  may  be 
argued  that  the  state  law  already  mentioned  requires  that 
the  erection  bonds  be  retired  from  the  earnings  of  the 
plant.  One  looks  in  vain,  however,  either  for  any  author- 
ity to  put  such  a  requirement  into  effect,  or  for  evidence 
of  its  enforcement,  as  exhibited  by  a  statement  of  municipal 
indebtedness. 

The  major  proportion  of  municipal  bonds  are  out- 
standing at  from  four  percent  to  four  and  one-half  percent 
interest.7  Four  percent  has  been  taken  as  reasonable  for 
a  plant  to  earn,  without  regard  to  the  rate  in  any  particular 

7See  Table  29. 


437]  MUNICIPAL    INDUSTRIES    AND    PROPERTY  77 

city.  Such  a  rate  is  conservative,  and  makes  some  allow- 
ance for  the  uniformly  excessive  valuation  of  the  proper- 
ties. 

The  necessity  of  charging  depreciation  against  a  plant 
is  more  apparent,  and  only  one  instance  will  be  presented 
as  evidence.  Springfield  found  itself  at  the  beginning  of 
1909  with  a  badly  delapidated  plant,  capable  of  maintain- 
ing at  times  only  twenty  pounds  of  pressure.  Repairs  and 
renewals  were  badly  needed,  but  since  the  city  had  reached 
the  debt  limit  no  bonds  could  be  issued;  and  since  no  de- 
preciation fund  had  been  maintained  the  money  must  first 
be  earned  by  the  plant  itself.  The  results  of  such  methods 
are  wasteful  operation,  high  charges  and  poor  service.  The 
estimated  life  of  four  municipal  water  plants  in  Wisconsin 
was  65.25  years  or  a  depreciation  of  something  less  than 
two  percent  per  year.8  This  latter  rate  might  be  assumed 

"The  calculations  of  the  lives  of  the  various  units  of  utility  equipment, 
upon  which  this  estimate  was  based,  were  kindly  furnished  by  Mr.  Edwin 
F.  Gruhl,  Statistician  for  the  Railroad  Commission  of  Wisconsin,  and  are 
as  follows : 

Wells,  driven  or  drilled  100        years. 

Wells,  large  open,  stone  or  brick  walled 50-100    " 

Suction  pipes  and  intakes 50-100    " 

Stand  pipes  50-75    " 

Reservoirs    75-100    " 

Filter  beds    100 

Cast   iron   mains,   fittings,    valves 100 

Hydrants    50 

Wrought  iron  mains,  services 

galvanized    50 

black    35-  40    " 

Services,  lead  100  " 

Fittings  and  valves  in  service  given  a  life  as  in  pipe  lines  in  which 
located. 

Meters 25 

Using  lives  similar  to  these,  the  average  rates  of  depreciation  for 
entire  waterworks  systems  were  computed  as  follows : 

Antigo  Water  Works 60.03  years. 

Manitowoc  Water  Works   66.16 

Superior  Water,  Light  and  Power  Co 67.29 

Chippewa  Falls  Water  Works  and  Light  Co 67.60      " 

Average    65.25      " 


78  MUNICIPAL  REVENUES  IN  ILLINOIS  [438 

were  the  depreciation  fund  to  lie  idle  and  earn  no  interest. 
In  private  plants  depreciation  funds  may  be  reckoned  as 
earning  4%  compound  interest.  In  the  case  of  public 
plants  the  funds  will  possibly  be  idle,  or  even  more  prob- 
ably spent.  In  this  latter  case  we  may  assume  that  the 
fund  becomes  a  debt  of  the  city  and  is  worth  at  least  four 
percent  simple  interest.  The  rate  of  depreciation  may  then 
be  said  to  lie  between  one-half  percent  and  two  percent  of 
the  depreciable  value, — and  by  depreciable  value  is  meant 
the  cash  value,  less  real  estate,  paving,  services  where  paid 
for  by  the  consumer,  and  extensions  made  during  the  cur- 
rent year.  The  mean  figure  of  one  percent  is  usually  al- 
lowed by  engineers  as  a  reasonable  depreciation  upon  this 
value.  Tho  this  latter  amount  cannot  be  known  for  the 
plants  here  in  question,  we  will  assume  that  this  depre- 
ciation applies  to  the  total  value. 

In  the  following  table  is  shown  for  thirteen  cities,  the 
estimated  value  of  the  plant,  interest,  depreciation  and 
cost  of  operation,  making  a  total  of  all  costs;  and  the  ex- 
cess of  this  sum  over  the  revenue  received,  which  may  be 
taken  as  the  amount  paid  by  the  city  for  the  public  service 
of  the  plant.  In  the  last  column  this  deficit  is  shown  as 
cost  per  hydrant.  In  the  second  table  is  presented  the 
average  daily  pumpage  of  each  city ;  the  total  cost  (interest, 
depreciation  and  operation)  for  pumping  each  million 
gallons;  the  actual  cash  income  from  water  rents  for  each 
million  gallons ;  and  the  actual  cost  of  operation  per  million 
gallons. 

These  tables  are  self-explantory  and  carry  in  some  de- 
gree their  own  criticism.  While  it  is  unfair  to  criticise  the 
administration  of  any  particular  city  because  of  high  cost 
of  operation, — since  the  conditions  of  operation  in  different 
cities  are  decidedly  different,  yet  taken  as  a  whole  the 
tables  may  indicate  the  general  tendencies  of  municipal 
management. 

It  will  be  noticed  that  three  of  the  thirteen  cities, — 
Decatur,  Evanston  and  Springfield,  are  operating  water 
works  with  a  distinct  surplus  above  a  liberal  estimate  for 


439] 


MUNICIPAL    INDUSTRIES    AND    PROPERTY 


79 


all  expenses.  In  such  instances  the  consumer  is  not  only 
paying  for  his  own  water,  and  for  the  service  to  the  city, 
but  is  turning  considerable  profit  into  the  city  treasury. 
In  Springfield  the  conditions  make  such  results  necessary, 
for  reasons  already  stated;  but  in  the  two  other  munici- 
palities, it  appears  that  the  water  rates  might  reasonably 
be  lowered. 

On  the  other  hand,  two  cities,  Joliet  and  LaSalle,  are 
evidently  operating  their  plants  at  a  loss.     The  public 

TABLE  19. 

STATISTICS   OF   MUNICIPAL   WATER   PLANTS   AND   COST   PER    HYDRANT   IN 
ILLINOIS  CITIES,   1909. 


"c 

"c 
n 

_o 

B 

• 

o  "S 

u 

4) 

1 

'K 

13 

£ 

.2 

O 

o 

^  ? 

O 

•-  I 

£ 

u 

L^    ^ 

£  ^ 

2 

*m  ^ 

1  £ 

o 

o< 

££E 

Its 

0,     M 

0    a 

!l 

5  ^ 

II 

Q  £ 

6 

3 

Aurora     .... 

$500,000 

£20,000 

$5,ooo 

$26,000 

$51,000 

$45,032 

$5,968 

517 

$11.50 

Bloomington 

350,000 

14,000 

3,5oo 

25,268 

42,768 

34307 

8,461 

506 

16.72 

Decatur    .  .  . 

450,000 

18,000 

4,5oo 

28,000 

50,500 

60,000 

9,500* 

540 

Profit 

Elgin    

585,000 

23,400 

5,850 

19,488 

48,738 

42,000 

6,738 

430 

15.67 

Evanston  .  .  . 

600,000 

24,000 

6,000 

27,873 

57,873 

93,697 

35,824" 

578 

Profit 

Galesburg    .  . 

285,000 

11,400 

2,850 

19,530 

33,78o 

24,614 

9,066 

386 

2349 

Jacksonville 

225,0002 

9,000 

2,250 

1  1,0024 

22,252 

16,554 

5,698 

205 

27,79 

Joliet    

600,000 

24,000 

6,000 

34,985 

64,985 

32,000 

32,985 

34i 

96.73 

LaSalle    .... 

250,000 

10,000 

2,500 

15,297 

27,797 

15,694 

12,103 

105 

115.26 

Ottawa    

235,000 

9,400 

2,350 

8,000 

19,750 

14,266 

5,484 

I671 

32.83 

Rockford    .. 

849,094 

33,963 

8,490 

31,833 

74,286 

64,449 

9,837 

519 

18.95 

Rock  Island 

900,000 

36,000 

9,000 

28,000 

73,ooo 

64,700 

8,300 

254 

32.68 

Springfield   . 

70/,8l  I3 

29,750* 

7,078 

54,258 

91,086 

123,083 

5/,997e 

906 

Profit 

Actually  used  by  water  plant. 

Estimated. 

3It  is  estimated  that  $850,000  of  the  banded  debt  of  the  city  is 
chargeable  to  the  water  works.  The  interest  is  at  3l/2%. 

48  mo.  -f-  pay  roll  for  4  mo. — 

To  be  accurate  an  estimate  of  the  taxes  should  be  included  in  this 
cost.  Owing  to  the  different  rates  of  assessment  and  taxation,  the  item 
of  taxes  is  omitted. 

'Surplus  of  income  over  all  costs. 


80 


MUNICIPAL  REVENUES  IN  ILLINOIS 


[440 


TABLE  20. 

STATISTICS  RELATIVE  TO  COST  OF  OPERATION  PER  MILLION  GALLONS  PUMPED 
BY  MUNICIPAL  WATER  PLANTS. 


f! 

a  J 

to   "rt 

I 

)peration 
on  Gals. 

a 

a 

per  Cap. 

nsumption 

service 

al 

^   c 

«  Cc 

U  :s 

0 

"c 

i<s 

*o 

rt    a, 
«3    £ 

"3  :•= 

E   ° 
o  S 

°  s 

J 

•o   « 

2  ^> 

•d 

<  tS 

Si 

J  i 

J  1 

i 

ffi  1 

>  'rt 

<  Q 

3 

Aurora     

1,789,000 

$78.30 

$69.00 

$40.00 

61 

8-5 

60 

Metered 

Bloomington    — 

1,750,000 

67.00 

53-75 

39.60 

46.75 

10.8 

67 

Metered 

Decatur    

3,000,000 

46.00 

92.00 

25.30 

So 

10.8 

96 

Metered 

Elgin    

2,292,000 

58.00 

56.15 

22.15 

56 

7-6 

88 

53%* 

Evanston 

6,056,000 

26.00 

42.20 

12.60 

75.067 

7-7 

148" 

Partly? 

Galesburg    

2,000,000 

46.20 

33.80 

26.80 

37.25 

10.3 

90 

Metered 

Jacksonville    .... 

800,000 

77.10 

56.75 

37.65 

30 

6.8 

52 

Metered 

Joliet    

4,500,000 

39.40 

19.50 

21.12 

39.38 

8.6 

129 

32%' 

LaSalle  

2,500,000 

32.00 

17.20 

16.80 

16 

6-5 

216 

None? 

Ottawa   

000,000 

90.20 

65.00 

36.50 

27 

6.2 

54 

Metered 

Rockford     

3,612,000 

56.50 

48.90 

24.20 

90-5 

5-7 

85 

5i%* 

Rock  Island  

3,500,000 

55.80 

48.50 

21.40 

37 

6.8 

134 

i5%2 

Springfield    

4,678,000 

53.50 

72.00 

31.80 

97 

8-3 

00 

5i%x 

JOf  the  water  revenue  is  from  metered  services. 
2Of  the  services  are  metered. 
"Supplies  a  suburb  at  a  flat  rate. 

cost  of  maintaining  hydrants  in  these  corporations  is  esti- 
mated at  $96.73  and  $115.26  respectively,  which  based  upon 
the  rates  charged  by  private  plants  is  excessive.  The  aver- 
age rate  charged  by  water  companies  in  seven  cities  of  the 
state  (without  reference  to  the  number  of  hydrants  in  each 
city)  is  $47.66,9  the  range  being  from  $25  in  Peoria  to 

"Alton  276  hydrants  @  $50.00 

Champaign  172  "  @  40.00 

Danville  440  "  @  40.00 

Freeport  190  "  @  50.00 

E.  St.  Louis 125  "  @  80.00 

150  "  @  70.00 

Peoria  1000  "  @  41.60 

113  "  @  25.00 


Streator 


112 
161 


@ 


45.00 
50.00 


441]  MUNICIPAL    INDUSTRIES    AND    PROPERTY  81 

|80  in  East  St.  Louis.  The  normal  rate  is  between  |40 
and  f 50  per  hydrant.  The  unweighted  average  cost  per 
hydrant  in  the  ten  municipal  plants  not  operating  at  a 
profit  is  $44.97,  while  in  most  of  the  cities  the  cost  is 
between  $15  and  $33.  A  more  exact  statement  would  be  to 
say  that  the  whole  public  service,  cost  this  much  per 
hydrant,  since  no  allowance  has  been  made  for  water  con- 
sumed for  other  public  purposes. 

If  two  cities  are  operating  municipal  plants  to  their 
direct  financial  detriment,  to  what  causes  may  this  loss  be 
ascribed?  In  both  Joliet  and  LaSalle  the  amount  of  water 
pumped  is  large  for  the  amount  of  capital  invested,  so  ex- 
cessive interest  and  depreciation  charges  may  not  be  ad- 
vanced as  reasons.  The  two  remaining  factors  which 
influence  the  charge  to  the  municipality  are  the  cost  of 
operation  and  amount  of  income  from  water  rents.  In 
both  cases  under  consideration  the  former  charges  are  low, 
being  $21.12  per  million  gallons  in  Joliet,  and  $16.80  per 
million  gallons  in  LaSalle.  At  the  same  time,  the  amounts 
received  for  water  in  these  cities  are  relatively  small  com- 
pared with  the  sums  received  in  neighboring  municipalities, 
being  under  $20.00  per  million  gallons  in  both  instances. 
Since  the  loss  can  neither  be  ascribed  to  the  fixed  charges 
nor  extravagant  operation,  it  follows  that  the  rates  charged 
in  these  cities  are  too  small  for  successful  operation  of  the 
plants.  In  these  two  instances  the  water  consumer  is 
profiting  decidedly  at  the  expense  of  the  tax  payer. 

In  other  instances  the  reverse  is  true.  For  example, 
Aurora  receives  $69.00  per  million  gallons  pumped;  De- 
catur,  $92.00;  Ottawa,  $65.00;  and  Springfield,  $72.00; 
while  the  incomes  of  several  other  cities  ranges  above  $50.00 
per  million  gallons.  In  all  of  the  above  mentioned  cities 
except  one  (Ottawa),  the  cities  are  receiving  fire  protection 
free,  or  at  a  cost  of  less  than  $17.00  per  hydrant ;  and  this 
in  spite  of  the  fact  that  two  of  the  municipalities  (Aurora 
and  Bloomington)  have  high  operating  costs.  Under  such 
conditions  the  taxpayer  profits  at  the  expense  of  the  water 
consumer. 


82  MUNICIPAL  REVENUES  IN  ILLINOIS  [442 

It  has  been  mentioned  that  in  two  cities  the  cost  of 
operation  was  high  compared  with  the  other  plants  of  the 
state.  Conditions  of  operation  vary  widely  in  different 
localities,  and  it  is  unfair  to  make  a  hurried  judgment 
concerning  the  efficiency  of  management  in  any  particular 
city.  We  may,  however,  compare  the  cost  of  operation  in 
the  municipal  plants  of  the  state  with  similar  items  of 
typical  private  plants.  The  operating  expenses  per  mil- 
lion gallons  for  nine  private  plants  in  Wisconsin,  were 
during  recent  years,  as  follows :  Appleton,  f 36.73 ;  Beloit, 
|23.35;  Eau  Claire,  $18.24;  Fond  du  Lac,  $20.31;  Green 
Bay,  $48.79;  and  Sheboygan,  $24.74.  An  average  for  the 
nine  plants  is  $29.78  or  allowing  for  pump  slip  (which 
was  done  in  the  figures  for  municipal  plants)  is  $33. 08.10 
The  average  cost  of  operation  per  million  gallons  for 
thirteen  municipal  plants  in  Illinois  is  $27.38  per  million, 
and  eight  of  the  number  fall  considerably  below  this  figure. 
This  would  seem  to  indicate  that  municipally  operated 
plants  compare  successfully  with  those  in  private  hands. 
It  must  be  remembered,  however,  that  municipal  plants 
pump  large  quantities  of  free  water,  and  frequently  have 
unmetered  service,  in  wThich  events  the  favorable  showing 
of  public  plants  might  be  accounted  for  by  the  law  of 
decreasing  costs, — with  cheapened  increased  production, 
rather  than  thru  any  retrenchment  or  economical  adminis- 
tration by  public  officials.  Caution  would  commend  this 
latter  view. 

The  situation  may  be  further  analyzed  by  comparing 
the  ratio  of  operating  expenses  to  revenues  in  public  and 
private  plants.  In  Wisconsin  private  plants  are  allowed  to 
earn  operating  expenses,  plus  a  reasonable  profit,  and 
depreciation.  The  "total  of  all  costs"  shown  in  table  21 
represents  the  same  earnings  for  municipal  plants.  For 
ten  private  plants  the  percentages  in  1908  were:11 

10R.  R.  Com.,  of  Wis.,  supra  cit.,  283. 
"Supra  cit.  p.  282. 


443]  MUNICIPAL    INDUSTRIES    AND    PROPERTY  83 

TABLE  21. 
RATIO  OF  OPERATING  COSTS  TO  RECEIPTS  IN  PRIVATE  WATER  PLANTS. 

Appleton  Water  Works  Co 63.04% 

Beloit  Water,  Gas  &  Electric  Co 41.01 

Eau   Claire  Water    Co 38.04 

Fond  du  Lac  Water  Co 33.69 

Green    Bay   Water    Co 42.73 

Janesville  Water  Co 47-40 

Manitowoc    Water    Co 46.99 

Marinette  City  Water  Co 34-57 

Sheboygan  City  Water  Co 27.34 

Average    t 39.34 

For  thirteen  municipal  plants  in  Illinois  the  ratio  of 
operating  costs  to  revenue  and  to  "total  of  all  costs"  is : 

TABLE  22. 

RATIO  OF  OPERATING  COSTS  TO  RECEIPTS  AND  "TOTAL  OF  ALL  COSTS" 

IN  MUNICIPAL  WATER  PLANTS. 
City.  Revenue        "Total  of  all   Costs." 

Aurora    57.8%  52.1% 

Bloomington    74.0  59.2 

Decatur   46.7  55.4 

Elgin    46.4  40.0 

Evanston     29.7  48.3 

Galesburg    79.  i  58.0 

Jacksonville    66.5  49.4 

Joliet    109.2  54.0 

LaSalle    97.5  53.0 

Ottawa  56.0  40.5 

Rockford    49.5  43.0 

Rock  Island 41.7  38.4 

Springfield    44.1  59.6 

Average  61.3  50.2 

From  these  two  tables  it  appears  that  one  city  is 
operating  its  water  works  at  a  net  loss,  another  within 
2.5%  of  its  income,  and  seven  spend  more  than  one-half 
of  their  income  for  operating  expenses.  Either  the  oper- 
ating expenses  of  municipal  plants  are  too  high  or  the 
charges  for  water  are  too  low.  The  second  column  of  the 
second  table  shows  operating  expenses  in  relation  to  the 
"total  of  all  costs".  A  liberal  allowance  has  been  made 


84  MUNICIPAL  REVENUES  IN  ILLINOIS  [444 

for  interest  and  depreciation,  yet  the  percent  for  operation, 
with  one  exception,  is  higher  than  the  average  for  private 
plants.  On  the  average  the  ratio  is  ten  percent  higher. 
While  these  figures  are  not  favorable  to,  they  are  not  an 
arraignment  of  municipal  ownership.  As  counter  argument 
it  may  be  advanced  that  low  rates  are  accompanied  by  lib- 
eral use  of  water,  which  is  a  matter  of  city  policy  and  not 
of  plant  management. 

Meter  or  fixture  rates  have  a  decided  influence  upon 
the  net  revenues  of  a  water  plant.  A  metered  plant  may 
operate  at  a  loss  thru  extravagance  or  low  rates;  a  fix- 
ture plant  has  the  handicap  of  wasted  water  in  every  case. 
In  table  20  is  stated  the  per  capita  daily  water  consump- 
tion of  the  cities  under  consideration.  The  metered  plants 
have  an  average  daily  consumption  of  69  gallons  per  per- 
son, while  the  average  for  the  remainder  is  almost  double 
or  132  gallons.  The  purpose  of  the  meter  is  not  to  require 
excessive  payment,  but  to  regulate  the  consumption  of 
water.  In  fact,  in  Springfield,  the  consumer  saved  from 
25 %  to  50%  by  the  adoption  of  meters.12  The  sudden 
adoption  of  meters,  because  of  the  large  decrease  in  con- 
sumption means  a  temporary  dimunition  of  the  city  in- 
come until  the  saved  water  is  purchased  by  new  users.  The 
saving  in  the  cost  of  operation,  however,  is  noticeable  from 
the  beginning.  In  Elgin  with  only  one-half  of  the  taps 
metered,  the  saving  in  one  year  (1907-08)  was  $6,000,  the 
annual  pumpage  being  reduced  50,000,000  gallons.  The 
wasted  water  is  paid  for,  not  in  proportion  to  what  is 
wasted  by  the  individual,  but  in  proportion  to  what  is 
wasted  on  the  average.  It  is  only  equitable  that  each  con- 
sumer should  pay  upon  a  graduated  scale  for  the  water 
which  he  consumes,  plus  a  fixed  charge  for  booking,  re- 
pairing, cost  of  meters,  meter  reading,  and  other  inci- 
dental expenses. 

"Springfield,  111.  Annual  Report  of  Water  Works,  1910,  p.  7.  In 
this  excellent  report  upon  a  rather  inadequate  plant,  Mr.  Willis  J.  Spauld- 
ing  presents  some  very  reasonable  arguments  for  metered  service  and  for 
the  payment  of  extensions  by  the  property  frontage  owner. 


445]  MUNICIPAL    INDUSTRIES    AND    PROPERTY  85 

A  further  immense  loss  to  commercial  revenues  is  due 
to  the  loss  of  water  by  leakage.  An  investigation  of  the 
municipal  plant  at  Madison,  Wis.,  showed  that  only 
45%  of  the  water  pumped  reached  the  consumer.  A  very 
conservative  estimate  for  the  city  of  Springfield  was  that 
22%  of  the  pumpage  was  being  lost.  The  estimated  life  of 
water  pipes  is  one  hundred  years.  In  heavy  soils  mains 
may  last  longer  than  this ;  but  in  light  or  stony  ground,  or 
where  there  is  action  by  electrolysis,  the  duration  cannot 
be  estimated.  Perhaps  several  municipalities  which  are 
contemplating  new  wells  and  enlarged  plants  to  supply  the 
demand  for  water,  might  find  it  cheaper  to  rent  a  pitometer 
and  investigate  the  conditions  of  mains  lying  parallel  to 
street  car  tracks,  or  which  have  been  long  in  the  ground. 

In  connection  with  water  mains  a  word  may  be  added 
concerning  the  extension  of  the  distributing  system.  It 
has  been  urged  that  the  cost  of  laying  new  pipes  be  charged 
to  frontage  by  special  assessment  rather  than  paying  it 
from  the  water  fund  or  from  general  taxes.  Nearly  one- 
half  the  cities  mentioned  here  have  adopted  this  method  in 
whole  or  in  part,  altho  many  miles  of  mains  have  been  pre- 
viously laid  out  of  the  water  fund. 

Under  the  water  fund  plan  of  extensions  there  is  a  con- 
stant rivalry  of  different  sections  of  the  city  to  secure 
water  services.  Since  the  funds  are  limited,  favoritism 
and  ill  feeling  may  be  expected,  combined  with  an  absolute 
restriction  upon  the  growth  of  the  city.  Moreover,  when 
pipes  are  laid  in  sparsely  settled  districts,  there  is  a  distinct 
rise  in  property  values  to  which  the  owner  has  contributed 
nothing,  the  water  consumer  bearing  the  cost.  Under  the 
old  system  the  consumer,  in  the  end,  not  only  paid  for  his 
own  frontage,  but  also  for  the  frontage  of  the  vacant 
property  owner.  The  change  to  the  special  assessment 
method  would  mean  that  the  consumer  would  pay  for  his 
own  frontage  in  a  lump  sum,  and  be  relieved  from  paying 
the  cost  of  his  neighbor's  improvement. 


86 


MUNICIPAL  REVENUES  IN  ILLINOIS 


[446 


LIGHTING  PLANTS. 

Municipal  lighting  plants  in  Illinois  yield  no  direct 
revenue  to  the  city  treasury,  since  they  are  not  permitted 
to  undertake  commercial  lighting;  yet  they  should  be  con- 
sidered owing  to  their  close  relation  to  municipal  water 
plants.  In  all  the  cases  of  public  lighting  systems  con- 
sidered the  lighting  plants  are  a  part  of  the  water  works, 
and  are  charged  a  fixed  proportion  of  the  costs  of  operation. 

An  act  of  the  legislature  of  188313  permits  cities  to 
levy  a  three  mill  tax  to  be  used  exclusively  for  the  purpose 
of  lighting  streets.  Under  this  act,  six  cities  do  their 
own  public  lighting,  a  statement  of  their  costs  being  pre- 
sented in  table  23. 


TABLE  23. 

STATISTICS    RELATIVE   TO    COST   OF    OPERATION 
PLANTS. 


IN   MUNICIPAL   LIGHTING 


1 

£ 

a 

3 

tn 
rt 

a 

^ 

"^ 

o 

s 

V4_) 

•g  ~ 

15 

i 

g 

^ 

0 

1  - 

| 

'« 

o  '•£ 

o 

1 

S, 

.  -  CL, 

g.^ 

1  1 

*rt 
o 

1 

1 

W  "o 

B 

Q    •£ 

CJO 

g 

% 

O 

Aurora    

$  40,000 

$1,600 

$I,2OO 

$io,oi41 

$12,814 

$418 

$^o  6? 

Bloomington   

100,000 

4,000 

3,000 

17,291 

24,291 

442 

54-95 

Decatur   

85,000 

3,400 

2,550 

14,000 

19,950 

3002 

66.50 

Galesburg 

45,000 

i,  800 

T   'JCfk 

10  OOO 

Cn 

yf 

Jacksonville    

25,000 

1,000 

750 

8,000 

9,750 

226 

43-14 

LaSalle    

50,000 

2,000 

1,500 

5-500 

9,000 

114 

79-82 

^5842  for  seven  months. 

2Is  rapidly  increasing  number  to  a  maximum  of  700. 

The  matter  of  interest  on  the  value  of  public  plants 
has  been  previously  discussed,  the  rate  taken  being  four 
percent.  The  rate  of  depreciation  is  much  higher  in  elec- 
tric plants  than  in  water  works.  From  data  furnished  by 
the  Railroad  Commission  of  Wisconsin  the  average  life  of 

"Rev.  Stat.  (1908),  ch.  24,  par.  281. 


447]  MUNICIPAL    INDUSTRIES    AND    PROPERTY  87 

a  complete  electric  light  plant  has  been  estimated  at  17.46 
years.14  In  municipal  plants,  maintaining  only  an  arc 
system,  the  average  life  would  be  a  trifle  longer.  The  Wis- 
consin Commission  estimate,  in  the  case  of  the  Menominee 
and  Marinette  Light  and  Water  Co.,  was  19.72  years.  This 
would  require  a  simple  depreciation  charge  of  five  per 
cent  per  annum ;  or  allowing  four  percent  compound  inter- 
est upon  the  depreciation  fund,  the  necessary  rate  would 
be  2.42%.  At  three  percent  interest,  the  rate  would  be 
2.85%.  Between  these  limits  three  percent  may  be  con- 
sidered as  a  fair  rate  of  depreciation. 

In  Table  23  is  shown  the  estimated  value  of  the  public 
lighting  plants ;  the  interest  on  these  sums  at  four  percent ; 
depreciation  at  three  percent;  cost  of  operation  for  the 

"The  unit  lives  involved  in  municipal  lighting  are : 

Generators  and  rotaries 20    years 

Static  transformers  20        " 

Steam  turbo-generators   20        " 

Switchboard  and  wiring  complete 20 

Lightning  arresters   10 

Weather  proof  copper  wire  installation 16        " 

Underground  cable    25        " 

Aerial  cables 15        " 

Manholes     50 

Conduits    12-18  " 

Cedar  poles  in  earth  20        " 

Cedar  poles   in  concrete 40        " 

Pole  anchors  and  guys 12-15  " 

Service  transformers    15 

Arc  lamps  and  span  equipment 15 

With  unit  lives  similar  to  these,  the  composite  life  of  complete  electric 
systems  was  computed  as  follows : 

Madison  Gas  &  Electric  Co 17.2  years 

Ripon  Light  and  Water  Co 18.24   " 

Superior   Light   &    Power   Plant 17.91    " 

Chippewa  Falls  Water  Works  &  Light  Co 15.60   " 

Green  Bay  Traction  Co 16.73    " 

Ashland  Light,  Power  &  Traction  Co 17.04   " 

Wisconsin  Traction,  Light  and   Power  Co 20.59   " 

Menominee  Light  &  Traction  Co 17-54   " 

Average    1746   " 


88 


MUNICIPAL  REVENUES  IN  ILLINOIS 


[448; 


last  fiscal  year ;  "total  of  all  costs" ;  number  of  lamps  and 
the  estimated  cost  per  lamp. 

The  figures  for  the  total  cost  per  lamp  may  be  com- 
pared with  the  prices  paid  to  private  plants  in  the  cities 
not  having  municipal  plants.  In  table  24  these  are  given 
with  the  number  of  lights  and  the  schedule  upon  which  they 
are  run. 

TABLE  24. 
CHARGES   BY   PRIVATE   ELECTRIC   LIGHT   PLANTS   FOR   ARC   SERVICE. 


City 

No.  of  Lights 

Charge 
per  Year 

Schedule 

Alton 

250 

$69 

Philadelphia 

Belleville 

aei 

/o 

Danville    

55 

00 

Complete 

Elgin 

425 
247 

40 
58 

Philadelphia 
Complete 

Evanston1    

103 
43 
386 

48 
42 
60 

Limited 
Limited 
Philadelphia 

Freeport 

130 

70 

Rockford2 

501 

S2 

Complete 

Rock  Island  
Streator    

287 
161 

60 
65 

Philadelphia 

*New  schedule  now  in  force, — $62.50  for  overhead  service;  $72.50  for 
conduit  services,  all  complete. 

2City  owns  the  means   of  distribution. 

Such  a  comparison  is,  however,  of  limited  value.  In  the 
first  place  municipal  plants  do  not  adopt  a  steady  schedule, 
but  burn  their  lights  as  the  circumstances  require. 
Further,  no  great  dependence  can  be  placed  upon  the  valu- 
ation of  the  plants  or  upon  the  costs  of  operation  which  are 
given.  In  most  cases  the  estimated  values  are  percentages 
of  the  total  figures  for  the  municipal  water  plants.  The 
lighting  plants  could  probably  be  duplicated  in  every  case 
for  the  amount  stated;  but  the  operating  costs  cannot  be 
accurately  checked  against  them  since  these  are  frequently 
given  as  one-third  of  the  combined  costs  of  operating  the 
light  and  water  plants. 


449]  MUNICIPAL    INDUSTRIES    AND    PROPERTY  89 

Remembering  these  limitations  upon  the  accuracy  of 
our  figures,  it  appears  that  three  cities, — Aurora,  Gales- 
burg  and  Jacksonville,  are  securing  light  at  a  less  cost 
than  could  be  done  by  private  contract.  In  the  other  three 
.cities  the  cost  of  municipal  lighting  appears  to  be  more  than 
the  lowest  charge  made  by  private  plants,  but  in  two  cities 
the  circumstances  point  to  an  actual  cost  which  is  lower 
than  that  shown  here.  Galesburg  is  rapidly  extending  to 
a  700  light  system;  while  the  figures  from  Bloomington 
appear  to  be  purely  guess  work  rather  than  a  careful  esti- 
mate. When  lighting  plants  are  operated  in  combination 
with  municipal  water  works,  using  boilers  which  otherwise 
would  stand  idle  at  night,  the  result  should  be  lighting  at 
a  small  cost.  Some  superintendents  complain  that  since 
they  are  not  allowed  to  sell  commercial  power  and  light, 
the  plants  are  at  a  disadvantage.  Such  permission  would 
put  into  usefulness  valuable  machinery  which  is  now  idle 
during  the  day  time.  In  small  cities  where  municipal  light- 
ing is  the  principal  item  of  light,  the  erection  of  a  private 
plant  in  addition  to  a  municipal  plant  is  a  useless  duplica- 
tion of  works ;  or  the  introduction  of  modern  lighting  is  de- 
layed until  the  private  industry  can  be  supported  without 
the  public  contracts. 

CEMETERIES. 

Public  cemeteries  are  authorized  by  an  act  of  the 
legislature  of  1874,  which  permits  cities  and  villages  to 
acquire  property,  sell  lots,  and  provide  a  board  of  control 
for  burial  grounds.15  Burial  grounds  are  owned  by  seven 
of  the  municipalities  visited  and  in  an  eighth  (Moline) 
they  become  public  in  1912.  These  undertakings,  however, 
are  of  small  importance,  as  sources  of  revenue.  The 
charges  are  not  such  that  public  operation  can  be  compared 
with  that  of  privately  owned  grounds.  From  the  point 
of  revenue  the  possession  of  these  grounds  is  a  decided  loss. 
Omitting  from  consideration,  both  the  interest  on  the 

"Rev.  Stat.  (1908)  ch.  21,  par.  5. 


90 


MUNICIPAL  REVENUES  IN  ILLINOIS 


[450 


original  investment,  and  the  constant  depreciation  from  the 
sale  of  lots,  the  cost  of  operation  and  maintenance  exceeds 
the  income  in  three  of  the  five  cases  in  which  the  costs 
were  obtainable.  The  sums  involved,  however,  are  incon- 
siderable. The  following  table  shows  the  revenues  as  well 
as  the  cost  of  operation  where  this  item  could  be  secured. 

TABLE  25. 
INCOME  AND  COST  OF  OPERATION  OF  MUNICIPAL  BURIAL  GROUNDS. 


„ 

0 

-P   $ 

13    c 

u 

3 
l     c 

c 
o 

*°  '% 

u 

ll 

£3 

•"    <u 

£  1 

%     0, 

tJO 

Aurora     

$2646 

$1296 

Belleville 

$->266 

$^455 

3721 

3500 

Bloomington    

334 

304 

4 

638 

841 

Elgin     

Freeport 

1420 

4177 
259 

1141 
238 

6738 

497 

1697 

Galesburg 

1487 

Jacksonville    

2160 

PUBLIC  LIBRARIES. 

The  income  accruing  to  libraries  might  be  tabulated 
with  other  city  revenues,  according  to  its  source, — as  fines, 
rents,  etc.  For  purposes  of  comparison,  however,  and  since 
these  sums  seldom  reach  the  city  treasury,  it  is  preferable 
to  treat  library  revenues  as  distinct  from  those  of  the  city. 

In  Table  26  is  shown  the  miscellaneous  income  from 
twenty-two  public  libraries.  The  latter  part  of  this  table 
refers  to  book  circulation  which  more  or  less  influences  the 
amount  of  income. 

Two  libraries,  in  Alton  and  Ottawa,  are  dependent 
upon  endowment  for  practically  their  entire  support,  the 
latter  receiving  a  city  appropriation  of  only  |500  per  year; 
Champaign  is  partially  independent  of  municipal  support. 
Evanston  has  two  small  funds,  the  interest  of  which  is  ap- 
plied to  the  purchase  of  books  upon  medicine  and  music. 


451] 


MUNICIPAL    INDUSTRIES    AND    PROPERTY 


91 


Quincy  has  for  general  purposes  the  income  on  a  very  small 
amount  of  money.  Even  aside  from  the  gift  of  library 
buildings  by  one  individual,  public  libraries  are  the  most 
favored  of  city  institutions  by  private  benefactors.  In 
Alton,  Champaign  and  Ottawa,  the  libraries  are  housed  in 
buildings  furnished  by  the  donor  of  an  endowment ;  while 
in  Alton  and  Ottawa,  the  endowment  is  sufficient  to  place 
the  management  independent  of  city  control. 

TABLE  26. 
STATISTICS  OF  PUBLIC  LIBRARIES.  ILLINOIS  CITIES,  1909. 


01 

JS 
PC* 

Renting 
Collection 

U5 
1 

Endowment 
Income 

Other  Misc. 
Revenue 

g 

ii 

3  > 
££ 

Endowment 

Av.  Daily 
Circulation 

I  d 

4?.* 

oJ3  § 

flnQpQ 

Alton    

$   253 

none 

none 

$2,400 

none 

$2,653 

$50,000 

284 

61 

Aurora 

396 

none 

none 

none 

none 

396 

none 

312 

95 

Belleville    

97 

31 

none 

none 

none 

128 

none 

ISO 

140 

TUnnm  inert  rm 

T  cn 

ncn 

nnnf* 

-5  Cfl 

T  A  cn 

nnnp 

ooe 

80 

Champaign    .  .  . 

243 

10U 

none 

you 

10 

500 

oou 
none 

1>4ou 

753 

10,000 

6*3 

160 

77 

Danville     

239 

none 

none 

none 

none 

239 

none 

270 

103 

Decatur   

358 

none 

none 

none 

none 

358 

none 

362 

86 

E.  St.   Louis    . 

238 

none 

none 

none 

30 

268 

none 

352 

166 

Elgin1  

229 

none 

none 

none 

none 

229 

none 

681 

t 

Evanston  

881 

235 

362 

252 

1,730 

6,925 

353 

70 

Freeport    

79 

18 

none 

none 

none 

97 

none 

2I/ 

82 

Galesburg    

370 

341 

none 

none 

179 

890 

none 

505 

43 

Joliet   

403 

none 



none 

639 

1,042 

none 

386 

89 

Ottawa    

89 

none 

75 

4,7i8 

5 

4,887 

75,ooo 

71 

134 

Peoria    

1,017 

none 

188 

none 

none 

1,205 

none 

679 

98 

Quincy 

24 

none 

25 

65 

none 

n^ 

none 

330 

no 

Rockford    .... 

398 

220 

430 

none 

none 

1,048 

none 

537 

84 

Springfield    .  .  . 

476 

none 

none 

none 

4i 

517 

none 

337 

153 

Streator  

181 

none 

none 

none 

25 

206 

none 

173 

82 

Urbana  

40 

none 

none 

none 

none 

40 

none 

108 

76 

^Township  library. 

Fines,  which  are  first  in  importance  of  the  incidental 
revenues,  bear  some  rough  relation  to  the  number  of  books 
in  circulation.  This  relationship  is,  however,  far  from 
exact,  indicating  probably,  not  a  difference  in  the  prompt- 


92  MUNICIPAL  REVENUES  IN  ILLINOIS  [452 

ness  of  book  borrowers,  but  rather  a  variation  in  the  en- 
forcement of  library  regulations. 

Six  libraries  rent  portions  of  their  buildings,  gaining 
in  two  instances  a  considerable  income  by  this  means. 
Carnegie-built  libraries  are  frequently  larger  than  is  now 
needed  for  library  purposes,  affording  space  which  may  be 
rental  to  clubs,  or  occasionally  is  occupied  by  the  per- 
manent offices  of  the  school  board. 

It  is  somewhat  surprising  to  find  that  only  six  libraries 
have  introduced  the  "renting  collection".16  While  this  field 
is  limited  to  the  newest  and  most  popular  fiction,  the  books 
are  put  in  circulation  as  soon  as  paid  for  by  the  rent  se- 
cured, permitting  the  general  revenues  to  be  applied  in  a 
more  profitable  direction.  The  figures  on  the  relation  of 
circulation  to  population  indicate  the  wide  range  of  library 
effectiveness  in  the  several  cities.  This  may  be  due  in  part 
to  the  variation  of  types  of  population;  but  the  library 
management  cannot  be  entirely  exonerated. 

CITY  HOSPITALS. 

Public  hospitals  may  be  established  upon  a  majority 
vote  of  the  citizens,  on  a  proposal  initiated  by  one  hundred 
petitioners.  Except  for  paupers  reasonable  compensation 
must  be  exacted  for  services  rendered.17  An  examination 
of  the  city  reports  shows  no  returns  from  this  source  paid 
directly  to  the  city  treasury,  altho  in  Ottawa  the  sum 
of  the  collections  was  reported  to  the  city  council.  The 
public  hospitals  in  Illinois  are  quasi-private  institutions, 
to  which  appropriations  are  made  by  the  city,  or  financial 
provision  is  made  for  the  care  of  cases  for  which  the  city 
is  responsible. 

Kecent  legislation  has  also  provided  for  the  establish- 
ment of  tuberculosis  sanitariums  and  legalized  a  four  mill 
tax  for  their  support.18  Services  are  to  be  free  except  for 

"Books  rented  at  nominal  charges. 
"Laws  of  1909,  p.  308. 
"Rev.  Stat.  ch.  24,  par.  685. 


453]  MUNICIPAL    INDUSTRIES    AND    PROPERTY  93 

medical  attendance  and  similar  charges.  Several  cities 
have  authorized  such  institutions  but  their  erection  is  de- 
layed until  financial  difficulties  can  be  cleared  up. 

STREET  RAILWAYS. 

There  are  no  municipal  traction  systems  in  operation 
within  the  state,  tho  such  are  authorized  under  certain 
conditions.19  Cities  may  organize  and  own  street  railways 
upon  approval  by  a  majority  of  the  voters  voting  on  such 
a  proposition  and  may  operate  such  railways  when  ap- 
proved by  three-fifths  of  those  voting;  or  the  city  may 
include  in  a  franchise  granted,  the  right  to  take  over  the 
system  upon  specified  terms.  A  municipality  may  also 
transfer  privileges  acquired  in  one  company  to  another, 
tho  any  lease  of  public  property  for  longer  than  five 
years  must  be  sanctioned  by  popular  vote.  In  the  case 
of  municipal  operation  the  charges  must  be  sufficient  to 
cover  the  cost  of  maintenance,  interest  charges,  and  to 
create  a  sinking  fund. 

By  a  two-thirds  vote,  a  city  may  issue  bonds  for  the 
purchase,  or  the  construction  and  equipment  of  street  rail- 
ways; or  may  acquire  the  same  by  condemnation.  In  the 
latter  case,  compensation  must  be  allowed  for  the  value  of 
existing  franchises.  If  the  system  is  owned  by  the  city  and 
leased  to  a  private  corporation,  the  rental  must  include  at 
least  interest  upon  the  investment  and  a  return  for  the 
franchise  value. 

By  a  majority  vote,  the  municipality  may  in  lieu  of 
bonds,  issue  street  railway  certificates  running  for  not  to 
exceed  twenty  years,  payable  only  from  the  net  income  of 
the  railway,  and  bearing  interest  at  a  rate  not  specified. 
These  certificates  may  be  secured  by  the  issue  of  mort- 
gage or  trust  bonds,  which  can  be  foreclosed  after  default 
of  interest  for  one  year.  Foreclosure  carries  the  privilege 
of  operation  by  the  private  company  for  not  exceeding 
twenty  years.  Under  the  Mueller  Law,  it  was  provided  that 

"Rev.  Stat.  (1908)  ch.  24,  par.  655  et  seq.;  Laws  of  1903,  p.  285. 


94  MUNICIPAL  REVENUES  IN  ILLINOIS  [454 

loans  secured  by  mortgage  certificates  could  be  issued  out- 
side of  the  debt  limit ;  but  the  supreme  court  has  beld  that 
this  may  not  be  done  under  the  present  constitution. 

Should  the  city  operate  a  street  railway  system,  there 
must  be  kept  separate  accounts  showing  the  actual  cost  to 
the  city,  cost  of  maintenance,  extensions  and  improvements, 
operating  expenses  of  every  description,  sinking  fund,  free 
water,  and  free  services  rendered  by  the  railway,  interest, 
depreciation,  insurance  and  exemption  of  taxes,  of  which 
an  annual  printed  account,  examined  by  an  expert  account- 
ant, is  required  to  be  made  to  the  city  council.  The  ac- 
counting of  these  various  items  presages  the  time  when 
city  utilities  will  be  conducted  separately  and  distinctly 
from  one  another,  and  independently  of  the  city  treasury ; 
and  when  any  surplus  created  will  be  devoted  to  the  use 
of  the  consumers  who  have  produced  it.  The  rule  which 
forbids  cities  engaging  in  private  business  for  a  profit, 
should  enjoin  their  engaging  in  public  enterprises  for  the 
same  purpose.20 

SEWERS. 

Sewer  systems  may  be  constructed  under  an  act  of 
1883  permitting  the  levying  of  a  three  mill  tax  for  that 
purpose,21  or  they  may  be  created  under  the  local  improve- 
ment law  which  permits  them  to  be  paid  for  by  special 
assessments  or  general  taxation.22  There  is  no  city  in 
which  a  revenue  is  derived  from  the  operation  of  sewers; 
and  the  method  of  extending  the  systems  has  been  con- 
sidered under  the  subject  of  "Special  Assessments".23 

REAL  ESTATE. 

Cities  owning  landings  on  navigable  rivers  may  lease 
portions  for  wharfage  for  a  period  not  exceeding  twenty- 

^See  ch.  IV  for  tax  on  franchises. 
nRev.  Stat.  (1908)  ch.  24,  par.  280. 
^Ibid.  ch.  24,  par.  507  et  seq. 
"See  chap.  IV. 


455]  MUNICIPAL    INDUSTRIES    AND    PROPERTY  95 

five  years.24  Quincy  has  four  such  leases, — one  terminable 
by  either  party  upon  sixty  days  notice;  one  to  expire  in 
1912;  and  two  to  expire  in  1934.  The  income  from  the 
entire  number  is  |320  per  year.  Rock  Island  also  has 
|200  per  year  income  of  a  similar  nature. 

Several  other  cities  receive  a  small  revenue  from  the 
lease  for  space  in  municipal  buildings,  pasturage  on  land 
used  for  garbage  disposal,  etc.  A  list  of  these  with  the 
source  of  the  income  is  given  below: 

TABLE   27. 
RECEIPTS  FROM  CITY  REAL  ESTATE. 

Alton  $167.      Ground  rent. 

Aurora   375-     Office  rent  and  use  of  polling  places. 

Champaign    265.      Building  rent. 

Elgin  189.      "Rents,  etc." 

Freeport     184.      "Use  of  polling  places." 

Galesburg    231.      Alley,  land,  and  pasture  rent. 

Moline    250.      "Use  of  city  real  estate". 

Rock  Island   1530.      Rents  and  ground  leased  to  railway. 

Springfield    540.      "Use  of  city  real  estate". 

Urbana  52.      Pasturage. 

Such  small  returns  from  city  property  might  be  con- 
trasted with  the  large  revenues  from  the  public  domains  of 
some  European  cities  where  the  management  of  real  estate 
is  often  an  important  corporate  function. 

OTHER  CITY  PROPERTY. 

Aside  from  the  interest  on  city  funds,  a  small  income  is 
derived  from  the  occasional  use  of  other  city  property. 
Cities  may  own  and  operate  bridges  and  ferries,25  charging 
a  sufficient  toll  to  cover  interest,  repairs,  sinking  fund  and 
operating  expenses.  In  Ottawa  the  ferry  tolls  amount  to 
$3248  per  year,  while  the  city  of  Rock  Island  received 
until  1908  about  $4000  per  annum  from  bridge  tolls.  The 
bridge  is  now  free.  An  obsolete  provision  of  the  statutes 

™Rev.  Stat.  (1908)  ch.  24,  par.  247. 
"Ibid.  ch.  24,  par.  194. 


96  MUNICIPAL  REVENUES  IN  ILLINOIS  [456 

permits  cities  coming  into  the  possession  of  toll  roads  to 
continue  to  collect  a  reasonable  toll,  tbo  no  new  toll  roads 
may  be  created. 

More  frequent  sources  of  revenue  of  this  sort  are  from 
public  markets  (scale  fees),  use  of  ambulances  and  of  city 
machinery.  The  following  cities  report  incomes  of  this 
nature:  Alton,  |810,  city  scales;  Aurora,  $204,  use  of 
ambulance ;  Belleville,  $480,  use  of  city  machinery ;  Bloom- 
ington,  $300,  from  McLean  County  for  tramp  house ;  Joliet, 
$84,  use  of  steam  roller;  LaSalle,  $112,  "use  of  city  prop- 
erty"; Moline,  $112,  use  of  city  scales;  and  Streator,  $18, 
for  ambulance  hire.  Doubtless  most  cities  have  items  of 
this  nature,  but  have  reported  them  as  miscellaneous  re- 
ceipts. Those  given  are  sufficient  to  show  the  amounts  and 
nature  of  this  income. 

INTEREST  ON  CITY  FUNDS. 

Interest  on  city  funds  is  an  almost  unutilized  source 
of  city  income,  as  a  rule  such  revenue  being  considered  as 
a  perquisite  of  the  city  treasurer.  The  few  cities  having 
permanent  funds  usually  receive  interest  at  some  rate,  but 
the  amount  lost  thru  failure  to  receive  interest  upon  cur- 
rent funds  is  large.  Such  funds,  however,  vary  in  amount, 
and  their  size  is  reduced  by  the  gradual  payments  of  tax 
warrants  and  floating  indebtedness. 

In  Chicago,  bids  are  made  upon  the  city  funds  and  the 
council  awards  to  the  highest  and  best  bidders  in  sufficient 
numbers  to  insure  safety, — bonds  being  given  by  the  banks 
as  security.26  A  special  scheme  is  adopted  by  which  each 
bank  is  checked  against  for  only  two  months  in  the  year 
thus  permitting  an  uninterrupted  use  of  city  funds  for  at 
least  five  months.  But  by  this  plan  only  one  and  one-half 
percent  per  annum  is  secured.  Any  law  relative  to  the 
smaller  cities  of  the  state  should  be  sufficiently  compre- 
hensive to  permit  the  cities  to  borrow  money  for  corporate 
purposes  from  such  permanent  funds  as  may  be  available, — 

"Merriam,  Municipal  Revenues  of  Chicago,  p.  103  et  seq. 


457]  MUNICIPAL    INDUSTRIES    AND    PROPERTY  97 

from  sinking  funds,  water  funds,  permanent  improvement 
funds,  etc.27  Such  a  move  would  secure  five  or  six  percent 
upon  these  permanent  funds,  the  present  rate  being  about 
three  percent.  Or  if  only  the  varying  current  funds  are 
available,  arrangements  might  be  made  with  banks,  by  al- 
lowing the  free  use  of  city  funds  during  the  early  part  of  the 
calendar  year,  the  municipality  might  borrow  without  in- 
terest when  the  treasury  is  depleted.  In  Elgin,  by  such  a 
plan  an  average  of  f 25,000  is  borrowed  each  year. 

Of  the  twenty-four  cities,  only  seven  receive  interest 
upon  funds  of  any  kind,  the  largest  amount  being  $16,306, 
which  is  returned  to  Quincy  upon  sinking  funds  aggregat- 
ing $354,789.  This  is  at  a  rate  of  about  four  and  one-half 
percent.  Five  percent  is  received  upon  the  larger  part  of 
this  fund.  All  the  interest  accruing  is  reapplied  to  the 
sinking  funds.  On  May  1st,  1909,  there  was  a  general  bal- 
ance of  $71,037  upon  which  no  interest  was  noted.  Evans- 
ton  received  $.3063  as  "interest  on  city  funds"  the  same 
being  applied  to  the  salary  fund.  Freeport  received  $1916 
as  "interest  on  bank  balances."  On  April  1st,  1910,  such 
balances  were  $67,534  for  special  assessments,  plus  $13,270 
for  general  cash  on  hand.  As  "interest  on  sinking  funds", 
Galesburg  received  $1667  per  year.  As  interest  upon  a  "spe- 
cial bridge  fund"  balance  of  $57,101,  Peoria  added  to  that 
fund  $1,001  during  1909 ;  the  interest  upon  a  "bridge  bond 
sinking  fund"  of  $8750  was  $417.  As  the  total  income  of 
the  city  for  the  year  is  nearly  a  million  dollars  the  interest 
return  is  inconsiderable.  In  Alton  the  city  finances  are 
in  such  excellent  shape  that  the  city  was  able  to  loan 
$30,000  of  the  general  fund  at  three  percent  interest.  In 
the  above  list,  however,  it  will  be  noted  that  the  return 
from  interest  on  current  funds  is  inconspicuous. 

The  following  table  represents  an  estimate  of  the  nor- 
mal amount  of  funds  which  lie  idle  in  the  city  treasuries. 
There  is  shown  the  entire  amount  received  during  the  year 
for  all  purposes,  as  well  as  the  balance  on  hand  at  the 
beginning  and  at  the  end  of  the  fiscal  years. 

2TCf.  Laws  of  1911,  p.  150. 


98 


MUNICIPAL  REVENUES  IN  ILLINOIS 


[458 


TABLE  28. 

BALANCES  AND  RECEIPTS  FOR  GENERAL  FUNDS,  SPECIAL  ASSESSMENTS  AND 
SPECIAL  FUNDS  FOR  THE  YEAR  1909. 

General  Funds.1 

Balance  at  beginning    Receipts,  Balance  at  end 

of  fiscal  year.              1909.  of  year. 

Alton  $14,286                   $214,377  $69,39i2 

Aurora    23,750                    220,334  18,870 

Belleville    1,764                     137,824  4,i332 

Bloomington    21,461                     265,723  IQ,44O 

Danville    75,843                    211,193  68,i9o2 

Evanston    115,412                     461,875  96,576 

Freeport 6,368                    111,696  13,270 

Joliet   55,062                     451,238  80,090 

Ottawa    43,395                      134,754  1,365 

Peoria   14,024                     576,694  21,942 

Quincy 71,604                     217,292  67,346 

Rockford |            17,223                     494,475  2i,i252 

Rock  Island 6,775                     118,673  io,6683 

Urbana   5,718                       85,059  2762 

Special  Assessments.1 

Aurora    see  above  $146,000  see  above 

Bloomington    $38,072                     1 15,397  $69,333 

Evanston    see  above                    126,180  7,288 

Freeport   82,230                       98,414  67,534 

Ottawa    13,644                       43,269  23,920 

Peoria   2,006                     315,693  385 

Quincy 1,632                       27,009  6,597 

Rock    Island 4,520                       14,491  7,097 

Special  Funds1 

Aurora    see  above  $69,273  see  above 

Bloomington    $7,392                            722  $i,350 

Joliet   78                       25,574  15,552 

Peoria   66,431                        12,1 13  20,603 

Quincy   354,789                       16,304  37i,O93 

Rock  Island 24,831                      63,922  24,51 1 

Grand  Totals.1 

Alton $14,286                   $214,337  $69,391 

Aurora    23,750                     435,6o7  18,870 

Belleville    1,764                     137,824  4,133 

Amounts  of  less  than  one  dollar  not  considered. 
Includes  all  funds. 
"Fiscal  year,  1907. 


459]  MUNICIPAL    INDUSTRIES    AND    PROPERTY  99 

TABLE  28.— Continued. 

BALANCES  AND  RECEIPTS  FOR  GENERAL  FUNDS,  SPECIAL  ASSESSMENTS  AND 
SPECIAL  FUNDS  FOR  THE  YEAR  1909. 

Balance  at  beginning    Receipts,  Balance  at  end 

of  fiscal  year.  1909.  of  year. 

Bloomington   66,925  381,842  90,223 

Danville    75,843  211,193  68,540 

Evanston    115,412  588,055  103,854 

Freeport   88,598  210,1 10  80,804 

Joliet   55,140  476,812  95,642 

Ottawa    57,059  178,023  25,285 

Peoria   82,461  904,500  42,930 

Quincy    425,826  260,605  445.Q36 

Rockford    17,223  494,474  21,125 

Rock  Island 36,106  197,086  42,276 

Urbana    5,718  85,059  276 

These  figures  do  not  show  the  maximum  or  minimum 
amounts  in  the  treasuries,  and  no  general  rule  concerning 
the  average  amounts  can  be  formulated,  since  the  conditions 
in  each  of  the  instances  are  radically  different.  In  the 
sixteen  cities28  issuing  tax  warrants  it  must  be  assumed 
that  the  treasuries  are  practically  empty  for  a  part  of  the 
year,  and  it  is  safe  to  conclude  that  a  share  of  the  sums 
paid  in  as  special  assessments  are  almost  immediately  used 
to  retire  assessment  bonds.  Delinquent  assessments  would 
be  an  exception  to  this  rule.  Of  taxes  and  licenses,  which 
form  the  working  balances  of  the  cities,  the  former  come 
in  over  a  period  of  the  five  months  from  January  to  June, 
while  the  latter  are  paid  quarterly  or  semi-annually. 

Under  the  recent  commission  government  law  for 
cities,  treasurers  in  such  cities  are  compelled  to  return  in- 
terest at  three  percent  on  city  funds.  A  review  of  the 
workings  of  these  cities  at  the  end  of  the  first  fiscal  year 
will  give  a  more  certain  clue  to  the  interest  loss  of  the  other 
cities  of  Illinois.  Judging  from  the  facts  at  hand,  such  loss 
is  not  less  than  |500  in  the  smaller  towns;  increases  to 
|1000  in  cities  of  very  moderate  size ;  and  probably  rises  to 
|5000  or  more  in  the  larger  cities  of  the  state. 

"See  Table  29. 


100 


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MUNICIPAL  REVENUES  IN  ILLINOIS  [460 


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CHAPTER   VI 

LOANS. 

Municipal  indebtedness  is  of  four  kinds, —  (1)  city 
bonds,  for  the  payment  of  which  are  pledged  the  faith  and 
credit  of  the  city;  (2)  interest  bearing  certificates  issued 
in  anticipation  of  the  collection  of  taxes;  (3)  floating  debt 
in  the  nature  of  unpaid  bills,  cash  paid  by  individuals  in 
advance  for  city  services  yet  unrendered,  such  as  water 
rents,  advances  on  pavement  construction,  etc.,  and  lastly, 
(4)  public  improvement  bonds  issued  to  contractors  as 
payment  for  special  assessment  work  in  which  the  respon- 
sibility of  the  city  extends  only  to  the  collection.  This  last 
item  is  discussed  briefly  in  another  place.1 

BONDED  INDEBTEDNESS. 

By  the  state  constitution  the  bonded  indebtedness  of 
cities  is  restricted  to  five  percent  of  the  assessed  valua- 
tion,2 which  since  1909  has  been  one-third  of  the  "fair 
cash  value."3  The  constitution  also  provides  that  suf- 
ficient direct  taxes  must  be  raised  to  liquidate  any  bonded 
indebtedness  within  twenty  years  from  the  date  of  incur- 

'See  Chapter  IV. 

Constitution  of  1870,  art.  9,  par.  12. 

'Laws  of  1909,  p.  308. 


FOOTNOTES  TO  TABLE  29. 
J$i2,68i  not  in  the  form  of  tax  warrants. 
Includes  $200,000  school  tax  warrants. 
'Includes  $78,800  school  tax  warrants. 
4See  Text,  page  108. 

"Itemized  in  year's  expenditure  as  "bills  payable". 
'Predominating   interest  rates  are  italicised. 
'Warrants  carried  for  use  of  city  funds. 
"Estimated. 


102  MUNICIPAL  REVENUES  IN  ILLINOIS  ^462 

rence,  and  to  pay  the  prescribed  rate  of  interest.4  It  is 
further  provided  that  bonds  may  be  registered  with  the 
state  auditor,5  in  which  instance  sufficient  taxes  to  pay  in- 
terest and  provide  a  sinking  fund  are  certified  by  the 
auditor  to  the  several  county  clerks,  such  rates  being  col- 
lected as  if  a  part  of  the  state  tax. 

The  necessity  for  the  bonded  debt  limit  may  be  seen 
by  referring  to  Table  29.  Four  cities,  Bloomington,  East 
St.  Louis,  Ottawa,  and  Springfield,  had  slightly  exceeded 
the  maximum  indebtedness  allowed,6  while  Quincy  was  in- 
debted to  over  ten  percent  of  the  equalized  valuation  and 
devotes  twenty-seven  percent  of  the  total  taxation  to  the 
payment  of  interest  and  the  retirement  of  bonds.  Four 
other  cities  had  a  debt  of  three  percent,  while  the  remainder 
were  indebted  to  about  one-half  of  their  allowance.  The 
average  was  three  and  four-tenths  percent  of  the  assessed 
valuation. 

Such  a  comparison  of  indebtedness,  based  upon  the 
property  assessment,  is  the  most  equitable  one,  yet  it  is  cus- 
tomary to  consider  the  per  capita  indebtedness  as  some 
criterion  of  the  financial  condition  of  a  city.  According 
to  the  census  bureau,7  there  is  considerable  irregularity 
in  the  per  capita  indebtedness  of  American  cities  of  over 
30,000  population,  the  tendency  being  to  increase  the  in- 
debtedness with  the  size  of  the  city.  This  tendency  is  also 
shown  in  the  smaller  cities  of  Illinois,  but  not  to  a  marked 
degree.  In  the  municipalities  of  over  20,000  population 
the  average  per  capita  debt  was  $11.005,  while  in  those  of 
a  less  size  the  average  per  capita  debt  was  $9.66.  Or  stated 
in  another  fashion, — the  average  population  of  the  cities 
of  Illinois  having  a  per  capita  debt  of  over  $7.40  was 
30,163 ;  of  those  having  such  a  debt  under  $7.40  it  was 
18,919.  In  the  cities  of  between  30,000  and  50,000  popula- 

4Constitution  of  1870,  Art.  9,  par.  12. 

"Act  of  Feb.  13,  1865;  amended  April  27,  1877,  and  June  4,  1879. 
"That  there  is  an  excess  in  these  cases  is  probably  due  to  school  dis- 
tricts which  are  not  exactly  coextensive  with  the  cities. 
'Special  Report,  Statistics  of  Cities;  1907,  p.  75. 


463]  LOANS  103 

tion  in  the  United  States,  the  average  per  capita  net  debt 
is  a  trifle  over  $40.00.8 

Bonds  should,  of  course,  be  retired  during  the  life 
time  of  the  utility  for  which  they  are  issued;  and  in  the 
absence  of  exact  data,  the  desirability  of  a  fixed  limit  is 
easily  demonstrated.  Peoria  is  still  paying  interest  on 
|42,000  of  bonds  representing  bounties  paid  during  the 
Civil  War.  The  interest  has  amounted  to  double  this  sum, 
yet  as  estimated  by  the  comptroller,  a  sinking  fund  tax 
of  $2,800  per  year  collected  for  ten  or  twelve  years  would 
pay  these  bonds  when  due.9 

That  the  amount  of  taxation  necessary  to  retire  city 
bonded  indebtedness  may  not  be  excessive  in  any  one  year, 
the  city  of  Quincy  (which  in  1881  was  burdened  with  a 
debt  of  nearly  $2,000,000  and  still  has  a  debt  of  over 
$600,000  )10  makes  use  of  a  plan  which  insures  a  bond  and 
interest  tax  varying  little  in  amount  from  year  to  year. 
An  ordinance  passed  in  1899,  a  certified  copy  of  which  is 
on  file  in  the  office  of  the  state  auditor,  outlines  the  amount 
to  be  collected  each  year,  and  provides  that  any  surplus 
shall  counteract  later  deficits.  By  this  method,  while  the 
amount  paid  for  bonds  and  interest  each  year  varies  as 
much  as  $35,000,  the  taxation  decreases  regularly  by  about 
$3,000.  This  is  a  rather  crude  use  of  a  complicated  scheme 
of  debt  retirement.  The  perfected  plan  would  permit  of  an 
equal  annual  tax  devoted  in  the  early  years  to  the  paying 
of  a  large  amount  of  interest  and  a  small  amount  of  prin- 
cipal, changing  gradually  to  the  larger  retirement  of 
principal  as  the  amount  of  interest  required  declines.  For 
example,  $20,000  indebtedness  at  5%  interest  is  incurred 
by  a  city,  and  a  $1,500  annual  tax  provided  for  liquidation. 
The  principal  for  the  second  year  is  $19,500  upon  which 

*Supra.  cit.  p.  307.  This  statement,  however,  represents  only  about 
84%  of  the  municipal  indebtedness  of  the  cities  concerned.  The  re- 
mainder, except  less  than  one  percent  of  floating  indebtedness,  consists  of 
tax  warrants  or  short  time  loan  certificates  in  anticipation  of  taxes. 

'Annual  report,  1909,  p.  12. 

"Annual  report,  1910,  p.  25. 


104  MUNICIPAL  REVENUES  IN  ILLINOIS  [464 

the  interest  is  $975.  Therefore,  $523  of  the  bonds  may  be 
retired  as  compared  with  $500  the  previous  year.  If  the 
total  of  bonds  may  be  retired  only  at  the  end  of  a  stated 
period  careful  actuarial  work  is  necessary  to  determine  the 
proper  tax  levy.  Although  this  plan  insures  absolute  jus- 
tice to  the  taxpayers,  the  difficulty  of  its  administration 
has  prompted  cities  to  turn  to  other  methods  of  liquidating 
indebtedness,  one  of  which  is  the  sinking  fund. 

A  sinking  fund  provides  that  sufficient  sums  shall  be 
set  aside  from  year  to  year,  so  that  at  the  end  of  a  pre- 
arranged period  a  sufficient  sum  shall  be  in  the  treasury 
to  retire  the  bond  issue  outstanding.  The  fixed  amounts 
to  be  set  aside  each  year,  dependent  upon  the  rate  of  inter- 
est received  upon  the  sinking  fund,  and  the  life  of  the  bonds 
to  be  retired,  have  been  carefully  calculated,  and  the  tables 
should  be  available  for  the  use  of  the  city  comptroller.11 
The  sinking  fund  method  of  debt  retirement  equalizes  the 
burden  of  the  taxpayer,  but  is  open  to  very  decided  dangers. 
Unless  compound  interest  is  paid  upon  the  sinking  fund 
the  method  is  an  extravagant  one;  the  taxpayer  not  only 
pays  the  interest  upon  the  bonds  outstanding,  but  also 
loses  the  interest  upon  the  cash  contributed  to  the  retire- 
ment fund.  Also,  owing  frequently  to  the  lack  of  publicity 
for  municipal  accounts,  sinking  funds  are  used  for  general 
municipal  purposes. 

It  is  not  uncommon  for  cities  to  invest  sinking  funds 
in  their  own  securities.  From  this  arises  a  danger,  espe- 
cially in  larger  cities  or  in  other  communities  dependent 
upon  local  capital  for  funds.  If  a  city  is  required  to  throw 
a  large  quantity  of  sinking  fund  securities  into  the  market 
in  order  to  retire  bonds  of  an  earlier  maturing  date,  the 
disturbance  to  the  financial  market  may  be  serious.  New 
York  City,  in  the  decacie  from  1950  to  1960,  will  be  com- 
pelled to  put  approximately  $200,000,000  of  such  sinking 

"An  excellent  set  of  tables  will  be  found  in  Sprague's  Tables  of  Com- 
pound Interest,  Discount,  Annuities,  Sinking  Funds  and  other  Computa- 
tions for  use  in  the  Accountancy  of  Investment,  published  by  the  author 
for  the  New  York  University  School  of  Commerce,  Accounts  and  Finance. 


465]  LOANS  105 

fund  securities  before  New  York  bankers.  This  is  perhaps 
a  "far  cry"  to  be  urged  for  consideration  in  the  smaller 
cities  of  the  nation. 

The  difficulties  suggested  have  prompted  municipal- 
ities to  resort  to  the  use  of  the  simpler,  but  less  equitable, 
plan  of  bonds  retiring  serially  over  a  series  of  years.  The 
bulk  of  the  interest  is  borne  by  the  tax  payers  in  the  earlier 
years;  but  they  have  the  compensating  advantage  of  using 
the  utility  created  while  it  is  new.  Practically  all  of  the 
Illinois  municipal  bonds  are  of  this  serial  type. 

TAX  WARRANTS. 

Tax  warrant  indebtedness  is  incurred  entirely  for  cur- 
rent expenses,  and  represents  how  far  the  expenditures 
have  at  some  time  exceeded  the  income  of  the  city.  Table 
29  shows  that  the  cities  which  are  already  heavily  bonded 
are,  with  few  exceptions,  also  issuing  a  large  amount  of 
tax  warrants,  though  the  less  indebted  cities  are  by  na 
means  free. 

Such  indebtedness  is  bad,  not  only  because  it  repre- 
sents municipal  extravagance,  but  owing  to  the  excessive 
rate  of  interest  which  it  bears.  The  funds  for  the  most 
part  are  furnished  by  banks,  the  preponderating  rate  of 
interest  being  five  percent,  though  as  low  as  4.74%  was 
charged  in  Jacksonville,  and  as  high  as  six  percent  in 
Springfield  and  Peoria.  Elgin,  by  allowing  the  free  use  of 
city  funds  to  banks,  has  been  allowed  to  borrow  |25,000 
annually  from  them  practically  free  of  interest.  The  rates 
charged  are  from  one  to  two  percent  higher  than  those 
on  municipal  bonds,  of  which  46.6%  are  floated  at  4% ; 
27.1%  at  4.5%  ;  14.2%  at  5%  ;  8.2%  at  3.5% ;  and  .075% 
at  the  high  rate  of  6%.  About  82%  of  the  bonds  outstand- 
ing are  floated  at  4.5%  or  below;  while  only  f  11,000  in 
warrants  are  drawing  less  than  5%,  and  these  are  at  4.75%. 

Before  1911  there  was  no  statute  which  allowed  a  city 
to  invest  the  money  of  its  special  funds  in  warrants  or  cer- 
tificates drawn  against  the  general  fund.  Such  a  law 
secures  to  the  municipal  corporations  the  high  rate  of  in- 


106  MUNICIPAL  REVENUES  IN  ILLINOIS  [466 

terest  paid  on  temporary  indebtedness,  and  is  desirable, 
even  though  affecting  only  a  limited  number  of  the  smaller 
cities  of  the  state. 

Under  the  circumstances  mentioned,  the  question  nat- 
urally arises, — would  it  not  be  expedient  to  relieve  the 
necessity  for  the  annual  issue  of  tax  warrants  by  the  float- 
ing of  a  bond  issue  at  a  lower  rate  of  interest?  There  are 
at  least  three  reasonable  arguments  against  such  a  process. 
In  some  cities  the  maximum  debt  limit  has  already  been 
reached,  so  these  new  bonds  could  not  be  legally  issued. 
Again,  the  presence  of  a  large  indebtedness  of  a  temporary 
nature  is  a  guarantee  against  further  marked  extrava- 
gance on  the  part  of  the  city  officials.  That  the  total  in- 
debtedness must  be  kept  within  such  bounds  that  loans 
may  be  easily  made  prevents  its  growth  out  of  the  pro- 
portion to  the  wealth  of  the  city.  Finally,  the  discrep- 
ancy between  the  rates  of  interest  on  bonds  and  warrants 
is  more  apparent  than  real. 

Tax  warrants  represent  the  need  of  an  amount  of 
money  for  a  short  time,  since  they  are  usually  issued  in  the 
winter  and  are  retired  as  soon  as  the  taxes  are  paid  in  the 
spring  or  early  summer.  Though  the  average  life  of  a  war- 
rant is  seven  months,  there  are  reasons  for  believing  that 
the  greater  amounts  of  money  are  used  for  a  less  time  than 
this.  For  example,  Bloomington,  Galesburg,  and  Spring- 
field, all  of  which  are  heavy  users  of  tax  warrants,  pay 
interest  for  five  months  or  less.  In  order  to  have  a  suf- 
ficient sum  on  hand  it  would  be  necessary  to  issue  bonds  to 
approximate  the  amounts  of  warrants  out,  sums  which,  ac- 
cording to  the  most  conservative  estimates,  would  lie  in  the 
city  treasuries  for  five  months  in  the  year.  On  such  a 
basis,  the  cities  would  not  be  the  losers,  if  they  pay  five- 
twelfths  more  for  warrants  than  bonds.  If  four  and  four 
and  one-half  percent  be  taken  as  the  typical  bond  rate  of 
interest,  then  it  would  be  profitable  to  float  warrants  at 
5.6%  or  6.3%.  Of  course,  in  cases  where  the  warrants  are 
running  for  year  terms,  as  are  f 200,000  of  Rockford  school 
warrants,  funding  would  be  expedient. 


467]  LOANS  107 

In  Galesburg,  while  school  tax  warrants  are  not  issued, 
the  salary  warrants  of  the  fiscal  year,  are  drawn  upon  an 
empty  treasury  and  bear  interest  at  six  percent. 

FLOATING  DEBT. 

No  defense  can  be  offered  for  floating  indebtedness. 
It  is  in  all  cases  but  one  (see  table  29)  connected  with 
large  bonded  and  warrant  indebtedness ;  and  one  is  entitled 
to  assume  that  there  has  been  at  some  time  mismanagement 
in  the  conduct  of  the  business  of  the  cities  so  burdened. 
Such  indebtedness  emphasizes  most  strongly  the  need  for 
scientific  budget  making  in  municipal  business.  Every 
departmental  head  should  be  required  to  estimate  in  ad- 
vance— and  in  detail — the  needs  for  the  year's  adminis- 
tration. Such  executives  should  then  be  required  to  spend 
the  sums  appropriated  according  to  the  advance  estimate, 
or  return  any  unexpended  balances  into  the  general  fund 
of  the  municipality. 

Any  city  working  without  a  classified  budget  is  as 
liable  to  suffer  from  unexpended  departmental  balances 
as  from  floating  indebtedness.  The  two  are  products  of  the 
same  cause, — a  poorly  drawn  budget.  To  the  ordinary 
voter  and  taxpayer  a  deficit  becomes  known  through  the 
newspaper;  the  use  of  unexpended  balances  is  not  so  easy 
to  discover.  The  curious  citizen  may  be  prompted  to  in- 
quire of  his  city  clerk  for  a  statement  of  monthly  expendi- 
tures of  the  several  departments  for  the  past  fiscal  year. 
He  will  be  interested  to  note  if  there  is  a  marked  increase 
in  departmental  expenditures  in  October  and  March, — 
more  especially  for  salaries.  If  services  were  unnecessary 
ten  months  in  the  year,  there  should  be  some  explanation 
if  the  payrolls  are  excessively  large  in  the  two  months 
which  immediately  precede  elections.  And,  if  this  expla- 
nation is  honest,  it  will  frequently  demonstrate  why  de- 
partmental heads  have  not  sufficient  funds  to  complete  the 
fiscal  year. 

The  indirect  effect  of  a  floating  debt  is  even  greater 
than  the  loss  of  the  cash  which  at  some  time  has  been 


108  MUNICIPAL  REVENUES  IN  ILLINOIS  [468 

wasted.  When  dealers  are  compelled  to  wait  an  undue 
period  for  the  payment  of  bills,  the  city  business  drifts  into 
the  hands  of  middlemen.  These  make  all  proper  allowance 
in  their  prices  for  long  waits,  and  the  city  treasury  suffers 
proportionately. 

In  Champaign,  the  $20,000  of  floating  debt  represented 
an  unpaid  light  bill  of  nearly  six  months  standing;  while 
$20,000  of  Urbana  bonds  in  1909  were  a  judgment  for 
floating  debt  on  current  expenses.  It  may  be  advanced  that 
owing  to  unexpected  decreases  in  revenues,  debts  of  this 
kind  must  occasionally  be  incurred.  This  is  perhaps  some- 
times true;  but  such  losses  could  be  anticipated  and  more 
adequately  met  if  city  finances  were  put  upon  the  same 
sound  basis  that  is  demanded  in  the  best  private  business. 

The  elimination  of  unsecured  indebtedness  by  this 
means,  as  well  as  the  promotion  of  efficiency  in  public  ex- 
penditures, would  be  secured  if  the  more  elementary  steps 
necessary  to  scientific  public  budget  making  were  followed : 

1.  The  finance  committee  of  the  city  council  should 
require  every  department  head  to  submit  an  estimate  of  pro- 
posed expenditures  for  the  coming  fiscal  year. 

2.  This  estimate  should  show  all  suggested  expendi- 
tures classified  by  salaries,  wages,  services  other  than  per- 
sonal, materials,  supplies,  equipment,  structure  and  parts, 
land,  capital  outlays,  fixed  charges,  pensions  and  contin- 
gencies.12    Such  a  division  would  enable  city  officials  to 
know  the  cost  of  a  single  service  or  supply  for  the  entire 
city,  or  to  compare  costs  as  between  departments. 

3.  The  departmental  estimate  should  also  show  the  de- 
partmental expenditure  for  the  same  services,  etc.,  for 
the  year  previous,  the  expenditure  of  the  past  six  months 
of  the  current  year,  the  expenditure  of  some  typical  month 
of  the  current  year,  and  any  increase  asked  for  next  year. 

uThe  complete  classification  as  suggested  for  the  United  States  gov- 
ernment by  the  President's  Commission  on  Economy  and  Efficiency  may 
be  seen  on  page  4  of  their  circular  No.  19,  to  be  obtained  through  any  con- 
gressman, or  the  similar  classification  of  New  York  and  Philadelphia  can 
be  secured  by  corresponding  with  the  comptroller  of  these  cities. 


469]  LOANS  109 

4.  Such  estimates  should  be  printed  in  a  tentative 
budget,  and  public  hearings  held  where  both  officials  and 
citizens  could  appear  to  defend  or  protest  against  suggested 
appropriations. 

5.  The  final  revised  budget  having  been  passed,  every 
departmental  head  should  be  required  to  regulate  his  ex- 
penditures as  outlined,  all  salaries  and  wages  to  be  ex- 
pended at  the  rate  of  one-twelfth  or  one-fiftysecond  per 
month  or  week,  except  for  temporary  employes. 

6.  Any  change  in  the  segregation  of  the  budget  should 
be  made  only  after  a  vote  of  the  city  council. 

7.  All  unexpended  balances  at  the  end  of  the  fiscal 
year  should  be  returned  to  the  treasury  of  the  city. 

Such  an  outlined  plan  is  not  experimental  but  is  in 
operation  in  the  largest  cities  of  the  country.  Not  only 
are  appropriations  more  efficiently  expended,  but  they  are 
considerably  reduced  when  granted  after  public  hearings. 
In  a  single  year  in  New  York  City,  surplus  appropriations 
of  $3,000,000  were  returned  to  the  municipal  treasury, 
which,  under  the  system  in  vogue  in  Illinois  municipalities, 
would  perhaps  have  gone  to  salary  increases  and  work  not 
contemplated  or  advertised  at  budget  time. 


CHAPTER  VII 

SUMMARY  AND  CONCLUSIONS. 

In  the  preceding  text  repeated  comparisons  have  been 
drawn  between  the  important  items  of  revenue  income 
of  the  several  cities,  especially  upon  a  per  capita  basis. 
It  is  unnecessary  to  review  these  here,  aside  from  stating 
the  conclusions  which  they  substantiate.  The  total  gen- 
eral revenue,  however,  should  be  considered.  This  general 
revenue  account  will  exclude  the  more  uncertain  and  un- 
stable items  of  school  revenue,  road  and  bridge  taxes,  spe- 
cial assessments,  and  commercial  revenue  which  is  not 
net  profit.  The  deduction  of  these  items,  all  of  which  fail 
to  affect  directly  the  general  administration  of  municipal 
government,  leaves  a  balance  devoted  entirely  to  the  sup- 
port of  the  cities.  This  residual  general  fund  for  each 
city  is  given  in  table  30,  with  the  principal  component 
parts.  In  table  31  is  shown  the  data  in  percentages. 

The  minimum  per  capita  income  is  $4.23.  This  is 
found  in  Champaign,  one  of  the  smallest  of  the  cities 
studied.  Similarly  low  per  capita  revenue  of  $4.53  and 
$4.40  prevails  in  Streator  and  Jacksonville,  both  small 
cities;  while  the  largest  per  capita  revenue,  $11.74,  is  in 
East  St.  Louis,  the  largest  municipality  considered.  Such 
figures  indicate  that  there  is  a  relationship  between  the 
size  of  the  city  and  the  necessity  for  increased  income  per 
inhabitant.  This  fact,  with  its  causes,  has  been  commented 
upon  in  the  introduction  to  this  study.  It  is  not  to  be 
expected,  however,  that  this  rise  in  per  capita  income  will 
be  regularly  progressive  as  population  increases.  Two 
of  the  smallest  municipalities,  LaSalle  and  Ottawa,  have 
a  per  capita  revenue  only  equaled  by  five  of  the  largest 
cities  of  the  group;  while  Kockford  and  Decatur,  both 
among  the  larger  communities  studied,  have  about  the 
minimum  cost  of  government  per  resident.  Setting  aside 


471]  SUMMARY   AND   CONCLUSIONS  111 

the  possibility  of  mismanagement  of  city  funds,  this  may 
mean  that  these  smaller  cities  have  assumed  costly  civic 
functions,  which  the  larger  municipalities  have  not  as  yet 
seen  fit  to  undertake. 

Considering  the  twenty-four  cities  as  a  group,  the 
earlier  contention  that  with  increasing  population  the 
municipalities  must  undertake  activities  formerly  left  to 
individuals,  is  amply  borne  out.  Of  the  six  largest  cities 
in  the  list,  five  have  a  large  per  capita  revenue,  and  only 
four  municipalities  of  between  seventeen  and  seventy-five 
thousand  population  have  an  income  of  less  than  |6.00  per 
person.  The  summary  table  No.  32  shows  graphically  the 
relative  rank  of  all  the  cities  as  regards  population  and 
per  capita  general  income. 

A  summary  of  the  conclusions  which  have  been  dis- 
cussed in  the  text  indicates  the  defects  in  the  system  of 
property  taxation  and  the  nature  of  other  undeveloped 
sources  of  income,  which  it  has  been  in  part  the  purpose 
of  this  thesis  to  consider : — 

1.  There  is  a  wide  diversity  among  the  municipalities 
of  the  state  in  the  rate  of  assessments  of  both  real  and  per- 
sonal property.    In  few  communities  is  real  estate  taxed  at 
its  full  cash  value,  while  personal  property  escapes  with 
from  one-fifth  to  one-third  of  its  legal  burden.     Undoubt- 
edly this  latter  discrepancy  is  only  an  unofficial  recognition 
of  the  unfair  double  taxation  inherent  in  the  assessment 
of  most  personal  property.     Without  entering  into  a  dis- 
cussion of  justice  in  taxation,  it  may  be  said  that  a  careful 
readjustment  of  personalty  values  would  add  as  much  as 
30%  to  municipal  incomes. 

2.  The  continuation  of  two  officials  for  the  collection  of 
municipal  taxes, — one  before  and  one  after  taxes  become 
delinquent, — involves  an  unnecessary  duplication  of  ad- 
ministrative machinery  and  results  in  loss  of  efficiency  and 
increased  costs.     If  the  functions  of  the  town  collector 
were  transferred  to  the  county  treasurer,  taxes  could  be 
collected  more  expeditiously,  more  completely  and  at  a  di- 
minished expense. 


112  MUNICIPAL  REVENUES  IN  ILLINOIS  [472 

3.  Practically  every  city  is  collecting  the  maximum 
legal  tax  allowed  for  general  purposes,  yet  there  is  an  in- 
creasing demand  that  the  municipalities  assume  new  and 
expensive  duties.     The  maximum  total  tax  rate  of  three 
percent  on  the  assessed  valuation  (one  percent  on  the  sup- 
posed full  value)  is  inadequate  to  meet  the  needs  of  the 
modern  city. 

4.  The  percentage  of  total  income  received  by  Illinois 
cities  from  other  sources  than  the  general  property  tax 
ranges  from  60%  in  Joliet  to  3%  in  Urbana.    The  large 
proportion  of  municipal  funds  derived  from  these  mis- 
cellaneous sources  in  certain  cities  indicates  the  inade- 
quacy of  the  present  system  of  taxation. 

5.  The   amount  of  municipal   income   derived   from 
liquor  licenses,  does  not  depend  upon  the  number  of  licenses 
issued,  but  with  considerable  uniformity  varies  directly 
with  the  cost  of  the  license.    An  increase  in  the  minimum 
cost  of  saloon  licenses  from  f  500  to  f  1,000  per  year  would 
not  only  result  in  the  issue  of  fewer  licenses,  but  would  be 
accompanied  by  a  decided  increase  in  revenues.    Also,  of 
no  inconsiderable  importance  is  the  reduction  in  police 
force  which  may  follow  a  limitation  in  the  number  of 
saloons  and  their  segregation  into  a  restricted  district. 

6.  In  cities  where  there  is  a  real  restriction  in  the 
number  of  saloons  in  proportion  to  the  population,  the 
licenses  normally  acquire  a  monopoly  value.    The  amount 
of  this  monopoly  value  has  been  estimated  for  several 
cities  under  consideration.     Since  the  municipalities  have 
reduced  the  number  of  existing  licenses  they  should  pro- 
portionately increase  the  charge  to  cover  any  loss  in  reve- 
nue.   A  premium  on  saloon  licenses  is  a  criterion  of  such 
a  loss. 

7.  Municipal  revenues  from  general  license  taxation 
would  be  increased  by  assessing  high  licenses  against  a  few 
industries  and  occupations  which  are  accustomed  to  license 
taxation.    In  numerous  instances  the  present  rates  are  un- 
profitably  low,  and  the  energy  necessary  for  a  complete  col- 
lection of  the  tax  is  dissipated  over  a  wide  field.     It  is 


473]  SUMMARY  AND   CONCLUSIONS  113 

not  infrequent  that  licenses  fail  to  yield  revenue  because 
the  licensing  ordinances  are  too  intricate  to  be  easily  ap- 
plied by  the  crude  machinery  provided  for  that  purpose. 

8.  Cities  which  largely  utilize  special  business  taxes 
find  in  them  a  remunerative  source  of  revenue.     In  view 
of  the  usual  under-assessment  of  stocks-in-trade,  doubtless 
some  tax  of  this  nature  is  justified.    Such  taxes,  however, 
are  difficult  to  administer  with  any  degree  of  equality, 
and  there  is  usually  local  prejudice  against  their  impo- 
sition.   A  trend  in  this  direction  must  be  gradual,  begin- 
ning with  those  occupations  which  require  some  measure 
of  sanitary  or  police  control. 

9.  One  of  the  most  profitable  and  equitable  of  tax 
returns  is  that  from  the  licensing  of  vehicles.     This  tax, 
going  into  a  special  fund  for  the  repair  of  streets  and  al- 
leys, relieves  to  some  extent,  the  unequal  burden  imposed 
by  the  special  assessment  laws  upon  the  property  owner. 
The  rates  upon  horse  drawn  vehicles  are  by  no  means 
uniform  throughout  the  state  and  where  the  minimum  tax 
is  imposed,  the  return  is  not  large.     The  tax  upon  auto- 
mobiles, however,  can  be  made  to  return  a  very  considera- 
ble income. 

10.  Insurance  brokers  frequently  avoid  the  payment 
of  the  tax  upon  the  business  of  foreign  fire  insurance  com- 
panies and  in  some  municipalities  the  law  is  not  enforced 
at  all.     This  would  be  avoided  if  a  nominal  license  fee 
were  imposed  upon  all  insurance  dealers  and  they  were 
compelled  to  render  an  annual  report,  under  oath,  of  all 
business  transacted. 

11.  Revenues  from  fines  and  costs  are  restricted  by 
the  frequent  non-assessment  of  fines  if  costs  are  paid,  by 
failure  to  assess  high  fines,  inclination  to  allow  cases  to 
be  prosecuted  by  the  state's  attorney,  rather  than  by  the 
city  officials,  and  finally  the  limited  number  of  arrests 
which  find  their  way  into  the  police  courts. 

12.  Fees    and    departmental    charges    are    neglected 
sources  of  municipal  revenue,  which,  were  they  adequately 
imposed  and  collected,  would  produce  an  income  equal  to 


114  MUNICIPAL  REVENUES  IN  ILLINOIS  [474 

that  obtained  from  general  license  taxes.  A  complete  fee 
system,  however,  would  involve  not  only  the  abolition  of 
the  practice  of  allowing  fees  as  salaries,  but  the  introduc- 
tion of  an  adequate  system  of  accounting  and  control 
which  would  insure  cities  receiving  payments  made. 

13.  Under  the  present  prevailing  system  in  Illinois 
by  which  public  service  corporations  are  usually  allowed 
to  fix  their  charges  at  the  point  of  maximum  profit,  fran- 
chise taxes  are  a  tax  upon  the  profits  of  the  corporation 
rather  than  upon  the  consumer.    However,  only  a  few  utili- 
ties pay  for  the  privileges  they  enjoy,  and  these  only  small 
sums.     A  considerable  number  of  franchises  will  expire 
in  the  near  future  permitting  cities  to  make  provision  for 
franchise  payments.     These  costs  may  be  imposed  either 
as  a  percentage  of  the  net  or  gross  annual  receipts  or  as 
an  initial  charge  for  the  right  to  continue  in  business,  or 
both. 

However,  the  number  of  perpetual  franchises,  espe- 
cially in  the  gas  and  telephone  industries  argue  in  favor 
of  some  form  of  legislative  control  over  the  prices  de- 
manded for  these  services.  Should  this  regulation  of  com- 
modity charges  be  brought  about,  any  tax  imposed  by  the 
city  upon  public  service  corporations  would  probably  be- 
come a  burden  upon  the  consumer.  The  conditions  require 
the  careful  and  honest  consideration  of  city  councils  and 
of  the  state  legislature. 

14.  In  the  operation  of  municipal  water  plants,  three 
cities  apparently  show  a  distinct  surplus  over  all  charges 
and  three  other  cities  make  a  satisfactory  financial  record ; 
while  seven  cities  have  a  high  percentage  of  operating 

expenses,  in  two  of  them  the  operating  expenses  exceeding 
the  total  revenue.  In  a  few  cities  the  water  rates  are  too 
high;  but  in  most  they  are  too  low  to  meet  operating  ex- 
penses, thus  burdening  the  tax  payer  at  the  expense  of  the 
water  consumer.  Estimates  for  six  municipal  lighting 
plants  indicate  that  three  have  furnished  street  lighting 
at  a  cost  less  than  the  charges  of  private  corporations. 
Were  the  municipalities  authorized  to  do  commercial  as 


475]  SUMMARY  AND  CONCLUSIONS  115 

well  as  public  lighting,  the  costs  would  probably  be  further 
reduced. 

15.  Publicly  owned  cemeteries  have  been  conducted 
at  a  financial  loss,  but  the  sums  involved  are  so  small  as 
not  to  demand  serious  consideration. 

16.  The  income    from    real    property  owned  by  the 
municipalities  is  an  inconsiderable  part  of  the  budgets,  and 
is  not  an  adequate  return  upon  the  value  of  the  property 
involved. 

17.  None  of  the  cities  investigated  received  a  sufficient 
return  in  the  form  of  interest  upon  the  cash  balances  in 
their  treasuries;  most  of  the  cities  received  no  interest 
whatsoever  upon  these  funds.    The  annual  loss  is  very  con- 
siderable, and  should  be  prevented  by  a  statute  requiring 
city  treasurers  to  account  for  a  return  upon  public  funds 
in  their  possession. 

18.  Considerable  sums  are  spent  by  municipalities  as 
interest  upon  short  time  loans  made  in  anticipation  of 
taxes.     The  rates  of  interest  are  higher  than  those  upon 
bonds  but  since    the    funds    are  needed  for  only  a  few 
months,  it  is  more  expedient  to  pay  a  higher  price  for 
short  time  loans    than    to    issue    bonds.      In    some    in- 
stances, however,    debts    of    this    nature  might  well  be 
funded.     A  yet  more  profitable  plan  would  be  for  cities 
to  borrow  from  their  special  funds,  which  will  insure  a 
much  higher  rate  of  interest  on  these  than  is  at  present 
received. 

19.  The  keeping  of  city  accounts  upon  a  receipt  and 
expense  basis    rather    than    by    revenues    and  liabilities 
works  to  the  continual  detriment  of  administrative  ef- 
ficiency.   Budgets  are  made  up  on  crude  estimates  of  city 
receipts,  and  not  upon  the  more  correct  basis  of  amounts 
legally  accruing  to  the  municipality  over  a  designated 
period.    This  system  of  accounting  not  only  prevents  inter- 
ested citizens  or  officials  from  learning  the  exact  financial 
status  of  the  corporation,  but  enables  executives  to  thrust 
the  burden  of  extravagance  or  dishonesty  upon  following 
administrations. 


116  MUNICIPAL  REVENUES  IN  ILLINOIS  [476 

20.  Less  than  one-half  of  the  cities  included  in  this 
study  publish  annual  reports  of  their  financial  affairs, 
and  in  those  published  there  is  a  marked  lack  of  unformity 
as  regards  date  of  appearance,  matter  contained,  method 
of  presentation  and  value  to  the  public.  There  is  urgent 
need  of  some  private  or  public  body  which  will  cooperate 
with  municipal  officials  in  applying  tests  of  efficiency 
to  city  government,  and  making  the  results  known  through 
uniform  city  reports. 


477] 


SUMMARY  AND   CONCLUSIONS 


117 


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118 


MUNICIPAL  REVENUES  IN  ILLINOIS 


[478 


TABLE  31. 
SOURCES  OF  GENERAL  REVENUE,  1909,  IN  PERCENTAGES. 


General 
Property  Tax 

u,    w 

°    C 

&  8 
3  3 

Other 
Licenses 

Wheel  Tax 

Foreign 
Insurance  Tax 

Police  Fines 

$ 
1 

Franchise 
Taxes 

Interest 

£ 

rt 
js 

3 

Other 
Revenues 

Alton    

57-8 

29.4 

5-3 

•  5 

1-45 

1.6 

none 

.21 

.86 

2.54 

.22 

Aurora   

70.0 

20.7 

1.63 

none 

•  79 

.96 

none 

1-9 

none 

.19 

4-6 

Belleville    .. 

54-7 

38.7 

3-2 

•  33 

•  43 

•  39 

.72 

•  77 

none 

.09 

.81 

Blooming'n 

61.5 

27.8 

2.6 

none 

.61 

-95 

1-35 

1.9 

none 

.81 

3-3 

Champaign  . 

92. 

none 

3-79 

none 

2.12 

.42 

none 

none 

i.46 

none 

Danville    ... 

56. 

36-4 

2.21 

none 

.91 

3-85 

.2 

none 

none 

•44 

.04 

Decatur    .  .  . 

83.7 

none 

2.1 

none 

2.08 

3-6 

.III 

none 

none 

.24 

8.1 

E.  St.  Louis 

7i- 

22.5 

3-56 

1.04 

•175 

.178 

•  5i 

•  23 

none 

•  039 

.485 

Elgin  

7i-4 

21.7 

1.98 

none 

•71 

.438 

.117 

•  39 

none 

3.38 

Evanston   .  . 

65.1 

none 

2.67 

3-9 

•  7 

1-59 

1-73 

none 

1.48 

.843 

21.9 

Freeport   ... 

62.2 

22. 

1-37 

none 

-99 

4.12 

none 

none 

1.78 

.09 

7-25 

Galesburg    . 

91.8 

none 

1.88 

none 

1.17 

2-3 

.082 

none 

1.24 

.66 

.895 

Jacksonville. 

85.8 

none 

1.32 

3-51 

2.1 

2.73 

.607 

none 

none 

.648 

3-86 

Joliet  

40.1 

54-6 

1.23 

none 

.813 

•  515 

1.36 

none 

•  425 

•  975 

LaSalle  .... 

52.3 

44. 

1.71 

none 

•  97 

•573 

none 

none 

none 

•  4 

Moline    .... 

61. 

35-8 

1-75 

none 

.803 

.236 

•  447 

none 

none 

none 

Ottawa   .... 

55-7 

31-3 

•533 

none 

1.  13 

-738 

•425 

2.48 

none 

6.05 

1.64 

Peoria  

65.5 

26.3 

2.3 

none 

1.41 

i.iS 

.771 

•0957 

273 

•  23 

1.  12 

Quincy    .... 

70. 

21.4 

I-I45 

1.03 

1.  21 

none 

•  378 

481 

.0336 

.027 

Rock  ford  .  . 

87.7 

none 

1.63 

none 

•  9 

•  5 

.66 

1-34 

none 

•  42 

8.75 

Rock   Island 

64.5 

29. 

2.22 

none 

i.  ii 

2.03 

.855 

none 

none 

•  346 

Springfield  . 

64- 

23-7 

1-35 

none 

.378 

1.28 

•  44 

•  0655 

none 

•  113 

8-7 

Streator   .  .  . 

51.25 

41-3 

1-57 

none 

1.8 

1-45 

none 

•  575 

none 

•  312 

1-37 

Urbana    

97-6 

none 

•95 

none 

•  77 

•77 

none]  none 

none 

•  0935 

none 

479] 


SUMMARY  AND   CONCLUSIONS 


119 


TABLE  32. 
RANKING  OF  TWENTY-FOUR  ILLINOIS  CITIES,  1909. 


c 

'a. 

CJ    'S 

n 

Person- 

ssment 

'ax  Rate 

f  General 
om  Taxes 

General 
ne 

75   c 

£1 

Income 
:enses 

1 

c 

o 

2   £ 

rt    i> 

t-< 

o  £ 

2  ° 

rt  K-  t 

rt  LJ 

_0 

1 

-    1 

Ii 

'£<< 

73 

S    c 

'S,    C 

'  S.  73 

•  5,  u 

'«   c 

I 

J5   | 

i  £• 

c 

^     0 

u    K 

S  g 

o    | 

11 

cS 

H  < 

£  < 

£  73 

O 

£  £ 

£  H 

t2J  O 

ol  j 

(2  $ 

Peoria 

I 

6 

4 

3 

_  _ 

6 

E.  St.  Louis.. 

2 

17 

10 

21 

IS 

8 

I 

i 

3 

19 

Springfield    .  . 

3 

4 

3 

7 

7 

14 

3 

3 

8 

9 

Rockford  .... 

4 

i 

i 

2 

23 

4 

10 

19 

19 

I 

Quincy   .  . 

5 

21 

22 

19 

I 

9 

2 

2 

10 

13 

Joliet  

6 

19 

17 

20 

19 

24 

23 

8 

i 

ii 

Decatur    

7 

14 

14 

13 

10 

6 

15 

21 

15 

4 

Aurora  

8 

8 

7 

II 

9 

10 

9 

10 

16 

3 

Danville  

9 

9 

13 

4 

16 

19 

20 

18 

7 

7 

Elgin 

10 

2 

Q 

I 

21 

7 

JJ 

je 

17 

2 

Bloomington  . 

ii 

3 

2 

9 

13 

16 

14 

1  D 

9 

1  / 
13 

8 

Evanston  .... 

12 

— 

— 

— 

— 

12 

5 

5 

— 

_ 

Rock  Island   . 

13 

15 

12 

ti5 

6 

13 

13 

12 

II 

12 

Moline    

14 

16 

18 

8 

5 

17 

12 

7 

6 

5 

Galesburg  .... 

15 

7 

5 

12 

12 

3 

4 

17 

— 

— 

Belleville   .... 

16 

18 

16 

16 

II 

21 

18 

ii 

5 

18 

Freeport  

17 

— 

— 

— 

14 

15 

17 

14 

18 

6 

Alton  

18 

13 

15 

6 

17 

18 

21 

16 

14 

10 

Jacksonville    . 

19 

10 

ii 

10 

20 

5 

19 

23 

— 

— 

Streator     

20 

20 

20 

17 

22 

23 

24 

22 

12 

15 

Champaign    .  . 

21 

5 

6 

5 

19 

2 

16 

24 

— 

— 

LaSalle   

22 

22 

21 

21 

2 

22 

22 

13 

2 

16 

Ottawa   

23 

12 

19 

3 

4 

20 

6 

4 

4 

17 

Urbana  

24 

II 

8 

18 

3 

I 

8 

20 

- 

— 

BIBLIOGRAPHY 

Constitution  of  Illinois. 

Kurd's  Revised  Statutes  of  Illinois  (1908). 

Session  Laws  of  Illinois,  1907,  1909. 

Kales  and  Liessmann :  Compilation  of  Illinois  Tax  Laws  and  Decisions, 
(1910). 

Report  of  the  Auditor  of  Public  Accounts  (1908). 

Reports  of  the  Wisconsin  Railroad  Commission. 

United  States  Bureau  of  the  Census :  Special  Report,  Statistics  of  Cities, 
1907. 

President's   Commission  on   Economy  and   Efficiency,  Circular  No.   19. 

C.  E.  Merriam :  Report  on  the  Municipal  Revenues  of  Chicago,  City  Club 
of  Chicago,  Pub.  No.  2  (1906). 

John  A.  Fairlie :  Report  on  the  Taxation  and  Revenue  System  of  Illi- 
nois (1910). 

Frank  J.   Goodnow :     City  Government  in  the  United  States. 

Sprague's  Tables  of  Compound  Interest,  Discount,  Annuities,  Sinking 
Funds  and  other  Computations  for  use  in  the  Accountancy  of  Invest- 
ment. 

Alton:     Annual  Reports,  1909. 

Aurora :     Municipal  Officers'  Annual  Report,  1909. 

Bloomington  :     Annual  Reports,  1909. 

Evanston :    Annual  Reports,  1909. 

Elgin  :    Annual  Reports,  1909. 

Freeport :     Annual  Reports,  1909. 

Galesburg:    Annual  Reports,  1909. 

Joliet :     Annual  Reports  of  City  Officers,  1909. 

LaSalle:     Annual  Reports,  1909. 

Peoria:     City  Comptroller's  Report,  1909. 

Quincy:    Annual  Reports  of  City  Officers,  1909. 

Rockford:     Annual  Reports,  1909. 

Rock  Island:     Annual  Reports,  1907. 

Springfield :     Annual  Report  of  Water  Works,  1910. 

Streator:    Annual  Reports,  1909. 


INDEX 

Accounting  methods,  municipal,  8,  115. 
Agricultural  property  exempt  from  tax,  14. 
Alton,  40,  41,  42,  50,  62,  go,  gi,  96,  97. 
Amusement  licenses,  see  licenses. 
Appleton,  Wis.,  82. 
Arrests,  49,  50,  51,  54. 
Assessments,  16,  19,  20,  23; 

rate  of,  in  ; 

rank  of  cities,  119. 

Aurora.  22,  27,  40,  50,  51,  53,  57,  62,  67,  72,  81,  89,  96. 
Automobile  licenses,  see  vehicle  tax. 

Back  taxes,  25. 

Bakery  tax,  42. 

Beloit,  Wis.,  82. 

Belleville,  40,  41,  42,  61,  96. 

Billiard  licenses,  see  licenses. 

Bloomington,  38,  41,  48,  52,  53,  59,  62,  70,  71,  81,  89,  96,  102,  106. 

Bonded  debt,  see  debt. 

Brewer  licenses,  see  licenses. 

Bridge  tolls,  95. 

Broker's  tax,  see  licenses. 

Budget  making,  107,  108,  109. 

Bureau  of  the  Census,  8. 

Business  taxes,  10,  41,  42. 

Cab  license,  see  licenses. 

Capital  stock,  taxation  of,  15. 

Cemeteries,  public,  89,  90,  115. 

Champaign,  18,  21,  89,  91,  108,  no. 

Champaign  County,  21. 

Charges,  departmental,  see  departmental  charges. 

Chicago,  8,  12,  13,  30,  48,  96. 

Cigarette  license,  40. 

City  funds,  96-99;  see  also  interest. 

City  hospitals,  92. 

City  property,  95,  115;  see  also  real  estate. 

Clearing  house,  municipal,  need  for,  10,  116. 

Coal  dealer  tax,  42,  43. 

Collection  of  taxes,  losses  in,  24. 

Commercial  revenues,  58. 

County  treasurers,  collections  by,  24. 

Cyclone  tax,  13. 

121 


122  MUNICIPAL  REVENUES  IN  ILLINOIS  [482 

Danville,  25,  38,  56,  71. 
^Debt,  101-107. 
-Decatur,  18,  29,  30,  41,  56,  71,  72,  78,  81,  no. 

Delinquent  taxes,  see  taxes. 

Departmental  fees  and  charges,  10,  58,  61,  113. 

Dog  tax,  32,  33. 

East  St.  Louis,   13,   18,  21,  33,  40,  41,  42,  44,  46,  48,  50,  59,  61,  72,  81, 

102,  no. 

Eau  Claire,  Wis.,  82. 

Electric  light,  see  Franchises  and  Lighting  Plants. 
Elgin,  22,  29,  72,  84,  97,  1 06. 
Endowments,  56,  91. 

-Evanston,  10,  18,  24,  38,  40,  43,  45,  Si,  56,  57,  59,  ?o,  71,  78,  89. 
Exemptions  from  taxes,  14,  15. 
Expenditures,  classified,  need  of,  108. 

Fees,  58,  59,  60,  113,  117,  118. 
Ferries,  95. 

Pines,  police,  see  police  fines; 
library,  see  library  fines. 
Pire  insurance  tax,  32,  45,  46,  113,  117,  118. 
Piremen's  relief  fund,  32. 
Fireworks  tax,  42. 
Floating  debt,  see  debt. 
Fond  du  Lac,  Wis.,  82. 

Foreign  fire  insurance  license,  see  fire  insurance  tax. 
Foundry  license,  see  licenses. 
Franchises,  9,  10,  15,  62-68,  114. 
Franchise  taxes,  61,  63,  117,  118. 
,Freeport,  24,  38,  40,  47,  50,  71,  72,  97. 

,  Galesburg,  18,  35,  40,  71,  72,  89,  97,  106,  107. 
Gas  Works,  see  franchise  taxes. 
General  funds,  98. 
General  licenses,  117,  118; 

see  also  licenses. 

Gifts,  grants  and  subventions,   55. 
Gifts  by  individuals,  57. 
Green  Bay,  Wis.,  82. 
Grocery  tax,  42,  43. 

Hay  and  grain  dealer  tax,  42,  43. 
Hospitals,  see  city  hospitals. 
Hotel  tax,  42. 
Hydrants,  79,  80,  81. 


483]  INDEX  123 

Ice  dealer  tax,  42,  43. 
Income,  city,   no,  117,  119. 
Inspections,  income  from,  58. 
Insurance  funds,  taxation  of,  16. 
Insurance  license,  see  fire  insurance  tax. 
Interest  on  public  funds,  10,  13,  96,  97,  98,  99,  115,  117,  118. 
.  Interest  on  debt,  rate  of,  100. 
Interurban  railways,  see  franchise  taxes. 

Jacksonville,  18,  44,  50,  57,  89,  105,  no. 
•  Joliet,  8,  9,  17,  18,  38,  40,  43,  50,  62,  79,  81,  96,  112. 
Juul  law,  12,  14. 

Kane  County,  21. 

LaSalle,  18,  29,  41,  49,  50,  56,  70,  72,  79,  81,  96,  no. 

Libraries,  13,  18,  91,  117,  118. 

License  cities,  taxes  in,  18. 

License  districts,  limitation  of,  27,  28,  29. 

License  revenue,  26. 

Licenses,  general,  9,  30-42; 

legality  of,  26; 

liquor,  9,  26-30,  34,  49,  112,  117,  118,  119. 
Lighting  plants,  9,  10,  86,  87,  114. 
Liquor  license,  see  licenses. 
Livery  stable  tax,  42. 
Loans,  101,  115. 

Losses  in  collection  of  taxes,  24. 
Lots,  assessment  of,  20. 
Lumber  yard  tax,  42,  43. 

Madison,  Wis.,  85. 

Mains,  miles  of,  80. 

McLean  County,  96. 

Meat  dealers'  tax,  42,  43. 

Meters,  water,  use  of,  84. 

Method  of  investigation,  7. 

Milk  dealers'  license,  39. 

Miscellaneous  income,  57,  58,  61. 

Moline,  22,  41,  44,  48,  96. 

Motorcycle  license,  see  vehicle  tax. 

Municipal  industries,  73;  see  also  water  plants,  lighting  plants,  etc. 

Mueller  law,  93. 

New  York  City,  104,  109. 
"No-license"  cities,  18. 


124  MUNICIPAL  REVENUES  IN  ILLINOIS  [484 

Omnibus  license,  see  licenses. 

Ottawa,  21,  30,  33,  35,  40,  41,  51,  67,  81,  90,  91,  92,  95,  102,  no. 

' Park  districts,  13,  18. 

Paving,  free,  64. 

Pawnbroker  licenses,  see  licenses. 

Peoria,   13,  30,  38,  40,  41,  43,  46,   51,   52,  53,   56,   59,  62,  70,  71,   72,  80, 

103,  105. 

Peddler  licenses,  see  licenses. 
Personal  property,  9,   15,  20-22. 
— » Pleasure  drive  districts,  14. 
Police  costs,  52. 

Police  fines,  9,  47,  48,  49,  51,  52,  54,  113,  117,  118. 
Pool  license,  see  licenses. 
Prostitution,  licensing  of,  forbidden,  32. 
Property  tax,  theory  of,  14. 
Public  libraries,  see  Libraries. 
Public  property,  sale  of,  58. 

• —  Quincy,  8,  18,  22,  39,  48,  51,  56,  61,  91,  95,  97,  102,  103. 

Railroads,  taxation  of,  15,  20. 

Railroad  Commission  of  Wisconsin,  77,  86. 

Real  estate,  taxation  of,  20,  94,  95,  115. 

Real  estate  broker  tax,  42,  43. 

Reports,  lack  of  city,  116. 

Restaurant  tax,  42,  43. 

Road  and  bridge  tax,  24. 

Rockford,    18,   25,  29,  30,   33,  35,  40,  41,  44,  46,  48,   52,   53,   57,   62,   71, 

72,  75,  106,  1 10. 
Rock  Island,  22,  30,  35,  39,  40,  48,  95. 

Sale  of  public  property,  61. 

Saloons,  see  licenses,  liquor. 
**  Sanitary  districts,   14,    18. 
——School  debt,  see  debt. 

School  tax,  13,  56. 

Services,  water,  kind  of,  80. 

Service  privileges,  61. 

Sewers,  71,  94; 

see  also  special  assessments. 

Sheboygan,  Wis.,  82. 
^^,  Sinking  funds,  13,  103,  104. 
_   ^Special  assessments,  68-72,  98. 

Special  funds,  98. 

Springfield,   13,  30,  41,  43,  44,  50,  59,  62,  71,  72,  78,  79,  81,  84,  85,  102, 

105,  1 06. 


485]  INDEX  125 

State  grants,  55,  56. 

Store  goods  dealers'  tax,  42,  43. 

Streator,  17,  18,  27,  35,  52,  53,  56,  96,  no. 

Streets,  see  special  assessments. 

Street  car  license,  see  licenses. 

Street  lighting,  see  Lighting  Plants. 

Street  railways,  municipal,  93,  94; 

see  also  franchises. 
Subvention,  see  gifts. 

Taxes,  assessment  of,  12,  16; 

business,   see  business   taxes; 

collection  of,  n,  16,  in ; 

delinquent,  16; 

exemption  from,  14,  15 ; 

personal  property,  21 ; 
i     -  prtwprc  of  municipalities,  n; 

school,  see  school  tax ; 

when  due,  16; 

see  also  property,  business,  vehicle,  etc. 
Tax  income,  17-19,  24,  112,  117,  119. 
Tax  rates,  9,  (£5)18,  19,  112,  119. 
Tax  warrants,  105,  106,  115; 

see  also  debt. 
Telephones,  64; 

see  also  franchises. 

Telephone  and  telegraph,  assessment  of,  20. 
Town  collectors,  collections  by,  24. 
Transportation,  free,  64. 
Tuberculosis  sanitariums,  92. 
Tuition,   56. 

Undertaker's  tax,  42. 

Unimproved  property,  exemption  from  taxation,  14. 

Urbana,  9,  18,  21,  35,  40,  43,  71,  108,  112. 

Vehicle  tax,  10,  32,  43,  44,  45,  113,  117,  118. 

Water  plants,  9,  10,  74-85,  114. 

Wheel  tax,  see  vehicle  tax. 

Wisconsin  Railroad  Commission,  77,  86. 


126 


MUNICIPAL  REVENUES  IN  ILLINOIS 


[486 


MAP  SHOWING  LOCATION  OF  CITIES  STUDIED. 


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